A general equilibrium theory with heterogeneous skills predicts a complementarity between trade and democracy in creating demand for superior technologies. Trade liberalization or democratization alone may lead to vested interests that limit technology adoption. We use panel data on technology adoption, at a disaggregated level, for the period 1980–2000. Exploiting within-country variation over time and the heterogeneous timing of trade liberalization and democratization, we document a significant and sizable positive interaction between trade openness and democratization for technology adoption. The result that transitions to open democracies are beneficial for technological dynamics is robust to a large set of checks.

Cervellati, M., Naghavi, A., Toubal, F. (2018). Trade liberalization, democratization, and technology adoption. JOURNAL OF ECONOMIC GROWTH, 23(2), 145-173 [10.1007/s10887-018-9155-5].

Trade liberalization, democratization, and technology adoption

Cervellati, Matteo
;
Naghavi, Alireza;Toubal, Farid
2018

Abstract

A general equilibrium theory with heterogeneous skills predicts a complementarity between trade and democracy in creating demand for superior technologies. Trade liberalization or democratization alone may lead to vested interests that limit technology adoption. We use panel data on technology adoption, at a disaggregated level, for the period 1980–2000. Exploiting within-country variation over time and the heterogeneous timing of trade liberalization and democratization, we document a significant and sizable positive interaction between trade openness and democratization for technology adoption. The result that transitions to open democracies are beneficial for technological dynamics is robust to a large set of checks.
2018
Cervellati, M., Naghavi, A., Toubal, F. (2018). Trade liberalization, democratization, and technology adoption. JOURNAL OF ECONOMIC GROWTH, 23(2), 145-173 [10.1007/s10887-018-9155-5].
Cervellati, Matteo; Naghavi, Alireza; Toubal, Farid
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/635240
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