Modelling International Economic Integration: Patterns of Catching-up, Foreign Direct Investment and Migration Flows
(by Michael Landesmann and Robert Stehrer)
wiiw Working Paper No. 27, March 2004
Keywords: international integration, foreign direct investment, endogenous productivity growth, trade and employment, migration
JEL classification: F15, F16, F21, F22, F43, O41
Countries covered: non specific
Topics: International Trade, Competitiveness and FDI, Labour, Migration and Income Distribution
This paper develops a Schumpeterian model of international specialization and catching-up. In a previous version of the model we looked at the impact on international trade specialization when different patterns of technological catching-up are followed. One of these is a Gerschenkron pattern at the industrial level, where the largest initial gaps in productivity give rise to the fastest relative productivity growth rates. Depending on the productivity, wage and profits dynamic there can be 'comparative advantage switchovers' in which a catching-up economy turns its competitive advantage towards medium- to high-tech areas. In this paper we follow up the impact of the unit profit or 'rent' patterns on foreign direct investment and through that on the speed of technology transfer and hence on differential productivity growth.
We show that labour market dynamics, productivity catching-up and investment patterns all combine to determine the evolution of the international division of labour. We point also to the impact on labour demand and wage structures (between skilled and unskilled workers) both in the lead and the catching-up economies. The model thus contributes to the literature on globalization and labour markets.
|Trade-Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity
(by Nick Bloom, Mirko Draca and John van Reenen)
wiiw Global Economy Lecture
22 October 2012, 4 p.m., Oesterreichische Nationalbank, Vienna 9, Otto-Wagner-Platz 3, OeNB auditorium, ground floor
|What went wrong in Slovenia and how to get out of the mess?
(by Joze P. Damijan)
wiiw Seminar Series 'EU in Crisis'
08 October 2012, 5 p.m., Venue: wiiw, 1060 Vienna, Rahlgasse 3
|The European Rim Countries - Challenges and Opportunities for EU Competitiveness
(by Vasily Astrov, Peter Havlik, Mario Holzner, Gabor Hunya, Isilda Mara, Sandor Richter, Roman Stöllinger and Hermine Vidovic)
wiiw Policy Note and Report No. 9, October 2012
49 pages including 3 Tables and 12 Figures