Academic Scientific JournalsThe role of technology gap in the trade of Poland: Panel estimation in the gravity framework
Keywords:
technology gap, trade, gravity, semi-mixed effect panel modelAbstract
The analysis presented in the following paper has been carried out for 234 trade partners of Poland in the period 1999–2013. We have selected the largest available dataset to obtain the most precise estimates possible. The technology gap has been measured by TFP and relative patenting performance controlling for quality of institutions as well as technology and innovation indices of the Global Competitiveness Report. To obtain unbiased results, we utilize semi-mixed effects model using the Poisson pseudo-maximum likelihood (PPML) estimator. The gravity framework proves to be robust. The coefficients on technology gap indicators differ significantly between different groups of trade partners by the level of income and the level of technological sophistication. The role of the technology gap is evident and supports the principal theoretical postulates.
Downloads
References
Aghion P., Howitt P., 1992, A Model of Growth Through Creative Destruction, Econometrica, no. 2.
Aghion P., Howitt P., 1998, Endogenous Growth Theory, MIT Press, Cambridge.
Anderson J.E., 2011, The Gravity Model, Annual Review of Economics, no. 1.
Anderson J.E., Wincoop E. van, 2003, Gravity with Gravitas: A Solution to the Border Puzzle, American Economic Review, no. 1.
Bergstrand J.H., 1985, The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence, Review of Economics and Statistics, no. 67.
Bergstrand J.H., 1989, The Generalized Gravity Equation: Monopolistic Competition and the Factor-Proportions Theory of International Trade, Review of Economics and Statistics, no. 71.
Egger P., 2000, A Note on the Proper Econometric Specification of the Gravity Equation, Economic Letters, no. 66.
Feenstra R.C., Inklaar R., Timmer M.P., 2013, The Next Generation of the Penn World Table, NBER Working Paper no. 19255, https://www.rug.nl/research/ggdc/data/pwt/v80/the_next_generation_of_the_penn_world_table.pdf [access: 04.08.2016].
Filippini C., Molini V., 2003, The Determinants of East Asian Trade Flows: A Gravity Equation Approach, Journal of Asian Economics, no. 5.
Grossman G., Helpman E.M., 1991, Trade, Knowledge Spillovers, and Growth, European Economic Review, no. 35.
Head K., Mayer T., 2014, Gravity Equations: Workhorse, Toolkit, and Cookbook, [in:] G. Gopinath, Helpman E., Rogoff K., The Handbook of International Economics, Elsevier – North Holland, Amsterdam – New York.
Helpman E., Melitz M., Rubinstein Y., 2008, Estimating Trade Flows: Trading Partners and Trading Volumes, Quarterly Journal of Economics, no. 7.
Kaufmann D., Kraay A., Mastruzzi M., 2010, The Worldwide Governance Indicators: Methodology and Analytical Issues, World Bank Policy Research Working Paper no. 5430.
Kepaptsoglou K., Karlaftis M.G., Tsamboulas D., 2010, The Gravity Model Specification for Modelling International Trade Flows and Free Trade Agreement Effects: A 10-Year Review of Empirical Studies, The Open Economics Journal, no. 3, http://www.bentham-open.com/contents/pdf/TOECONSJ/TOECONSJ-3-1.pdf [access: 04.08.2016].
Kubielas S., 2009, Innowacje i luka technologiczna w gospodarce globalnej opartej na wiedzy. Strukturalne i makroekonomiczne uwarunkowania, Wydawnictwo Uniwersytetu Warszawskiego, Warszawa.
Lall S., 1992, Technological Capabilities and Industrialization, World Development, no. 2.
Lucas R.E., 1988, On the Mechanics of Economic Development, Journal of Monetary Economics, no. 22.
Martínez-Zarzoso I., Márquez-Ramos L., 2005, Does Technology Foster Trade? Empirical Evidence for Developed and Developing Countries, Atlantic Economic Journal, no.1.
Posner M.V., 1961, International Trade and Technical Change, Oxford Economic Papers, no. 13.
Proença I., Sperlich S., Savasci D., 2015, Semi-Mixed Effects Gravity Models for Bilateral Trade, Empirical Economics, no. 1.
Romer P.M., 1986, Increasing Returns and Long-Run Growth, Journal of Political Economy, no. 94.
Romer P.M., 1990, Endogenous Technological Change, Journal of Political Economy, no. 98.
Santos Silva J., Tenreyro S., 2006, The Log of Gravity, The Review of Economics and Statistics, no. 4.
Schwab K., 2014, The Global Competitiveness Report 2014–2015: Full Data Edition, World Economic Forum, Davos.
Tinbergen J., 1962, The World Economy. Suggestions for an International Economic Policy, Twentieth Century Fund, New York.
Vernon R., 1966, International Investment and International Trade in the Product Cycle, The Quarterly Journal of Economics, no. 2.
Wang C., Wei Y., Liu X., 2010, Determinants of Bilateral Trade Flows in OECD Countries: Evidence from Gravity Panel Data Models, World Economy, no. 7, http://eprints.bbk.ac.uk/3468/1/3468.pdf [access: 04.08.2016].
