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Understanding North South technological flows From macro to micro. Giorgio Barba Navaretti University of Milan and Centro Studi Luca d’Agliano World Bank, Knowledge Economy Forum VII Ancona June 17, 2008. Structure of presentation. First and second unbundling: - PowerPoint PPT Presentation
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Understanding North South technological flows From macro to microGiorgio Barba NavarettiUniversity of Milan and Centro Studi Luca dAgliano
World Bank, Knowledge Economy Forum VIIAncona June 17, 2008
Structure of presentationFirst and second unbundling:From polarization (from 1750 to 1950) to technology transferChannels of North South transfer:Trade Fdi Increasing emphasis on the role of the firm => Beyond representative agent Third unbundlingFragmentation of productionGeography of technology flows changes
First unbundling: markets from production
Grafico10
410887
916866
1425866
21641043
38871242
691001731
1261152632
source: Baldwin and Martin NBER 6904 from Bairoch (1982)
USA
UK
Italy
China
India-Pak
Per Capita Industrialization Levels, 1750-1913 (UK 1900=100)
Foglio1
Per Capita Industrialization Levels, 1750-1913 (UK in 1900=100)Composition of North-South Trade, 1955 to 1989
1750180018301860188019001913North's Exports to South:
USA49142138691261955197019801989
UK1016256487100115Manufactures (% of total)73787979
Italy88810121726South's Exports to North:
China8664433Fuels (% of total)20336625
India-Pak7663212Other Primary (% of total)74511821
Manufactures (% of total)5161553
Source: Wood (1994), which is based on UNCTAD data and definitions.
OLS with Lagged and Contemporaneous Spillover Variables
Domestic Firms
Backward0.0086*
(0.0051)
Forward0.0001
(0.0027)
Horizontal0.0040***
(0.0014)
Intercept5.2082***
(0.0876)
No. of observations10,216
0.92
Source: Smarzynska Javorcik (2004)
Foglio1
source: Baldwin and Martin NBER 6904 from Bairoch (1982)
USA
UK
Italy
China
India-Pak
Per Capita Industrialization Levels, 1750-1913 (UK 1900=100)
Foglio2
Foglio3
Second unbundling:ideas from production and markets
Foglio1
Per Capita Industrialization Levels, 1750-1913 (UK in 1900=100)Composition of North-South Trade, 1955 to 1989
1750180018301860188019001913North's Exports to South:
USA49142138691261955197019801989
UK1016256487100115Manufactures (% of total)73787979
Italy88810121726South's Exports to North:
China8664433Fuels (% of total)20336625
India-Pak7663212Other Primary (% of total)74511821
Manufactures (% of total)5161553
Source: Baldwin and Martin, from Wood (1994).
Foglio1
00000
00000
00000
00000
00000
00000
00000
source: Baldwin and Martin NBER 6904 from Bairoch (1982)
USA
UK
Italy
China
India-Pak
Per Capita Industrilization Levels, 1750-1913 (UK 1900=100)
Foglio2
Foglio3
Channels for technology transferTradeCoe-Helpman (1995) onwardsKnowledge content of trade
FDI: analysis of spilloversBlomstrom et al in the 80s on developing countriesBUT MOSTLY IN THE AGGREGATE
How to measure quality of trade:e.g. Knowledge content of machinesFrom Barba Navaretti, Schiff and Soloaga, 2006
Chart2
101.3537108679105.180221325673.963872906379.509195405796.8995489797
99.0700231981101.175746228171.654745272577.909269070396.9188672749
92.562576310896.579592727766.346734950978.752929211892.9429250597
89.251223623994.291541309365.335329095975.953524446192.8264975003
79.189885017591.587516079965.107641677872.33895247589.3644576577
75.688843742193.231246127167.052258031272.780428924191.6918283546
69.970085178293.496696394765.593335834870.973377530288.3736622329
Egypt
Israel
Morocco
Tunisia
Turkey
Three years moving averages
Aggregate Unit Value Index (US=100)
Figure 2aTrends in the Aggregate Unit Value IndexSouthern Mediterranean
Sheet1
1989199019911992199319941995199619971989-911990-921991-931992-941993-51994-61995-97
311Bulgaria167120147881071137771861451191141039987781989-911990-921991-931992-941993-51994-61995-97
313Bulgaria147214314216122108145141153225248218149125131146
321Bulgaria1421081201511251168978851241261321311109484Egypt101999389797670
322Bulgaria1171136262508036363297795864555034Hungary1231059187848177
341Bulgaria167184106110126101117140166152133114112115119141Israel1051019794929393
342Bulgaria1481259210361958698941221078586819393Jordan82777474748086
362Bulgaria94701636079556465341099810164666155Morocco74726665656766
371Bulgaria26828313811513012387113180230179128123113108127Poland116948480797776
323324Bulgaria14012214015777671038992134140125100828695Tunisia80787976727371
331332Bulgaria101138936979586343401111008069675549Turkey97979393899288
355356Bulgaria108151701029927110175611101089015715714979
381382384Bulgaria19417718016013717914235967184172159158153226189
311Egypt92968881836959626992888478706363
313Egypt79100971006497875712992998787838091
321Egypt88786968655964645478716764636261Bulgaria14513411711010210597
322Egypt105959384604850753298917964535852Malta118110120116124129138
341Egypt13010712811910481477266122118117101776762Romania12311411111211010296
342Egypt13110274659169526854102807675716358
362Egypt73546873716356584065657169635951
371Egypt19928716324518825514710283216232198229196168111
323324Egypt150617681636794995995727370758784
331332Egypt646467140656459734765909089636560
355356Egypt74759076555572666880817462616569
381382384Egypt1181141038790687077871121029382767278
311Hungary143.9103.2107.3108.179.691.876.782.577.11181069893838479
313Hungary1851241101057763100104831401139781808996
321Hungary118110859682951027660105978891939179
322Hungary95935265504441363580705653454137
341Hungary10911410813911392868393110120120114978787
342Hungary150977679891381328769108848110212011996
362Hungary132109105658479686942115938576777259
371Hungary18642114497938589727325022111192898278
323324Hungary14467907512560899387100779787918189
331332Hungary23110483997064655153140968478666056
355356Hungary121897787748189656396847981817872
381382384Hungary133951041128492831107611110410096869590
311Israel128103106103888882101891121049993869091
313Israel12311181124867768941151051059796778093
321Israel100100116108991049686841061081081041009589
322Israel17414312414811811897115104147138130128111110105
341Israel1051241531038310311374107128127113961009798
342Israel10798104959396908685103999795939187
362Israel85675461714858625469616260595658
371Israel117998311110210699946510098991061029986
323324Israel12971937277741021281109879817485101113
331332Israel779176988683126828181888789989796
355356Israel1151038911589959492113102103981009394100
381382384Israel1131289493819910711994112105899196108107
311Jordan12610399655959687676109897461626874
313Jordan112684914771119678370778889112859073
321Jordan8910685608787831158993847778869595
322Jordan1229223545067821194279564257668981
341Jordan981207894739396848798978287879189
342Jordan13957117888499998279104879690949387
362Jordan32267145574849263343485850514136
371Jordan368581868051170965867848272100105108
323324Jordan77119811271036636122779210910499697578
331332Jordan59649749436852377173706353545253
355356Jordan120356151578866545272495766716957
381382384Jordan111705765616468147397796461636493204
311Malta127115109686775767380117988270737576
313Malta7684878612979699230828610198928064
321Malta1048510990829483959399959389869190
322Malta111719378194106921141089180122126131104105
341Malta474860882151438869104526512114914910087
342Malta200115211135218172273144299175153188175221196239
362Malta58657570464441937466706453435969
371Malta127107899917567859066108991211141098080
323324Malta304119274135124193200299273232176178151172231257
331332Malta826497865770110846081838071798885
355356Malta177137183206114193230323174166175168171179249243
381382384Malta139194123120118140187258344152145120126148195263
311Morocco91687255555547614777656055525452
313Morocco91120116167882129976146109134123155133129107
321Morocco70767470787667675974737475747064
322Morocco56524652504046524051504947454646
341Morocco7110210160665162626291887659605962
342Morocco79666849505656616271615652545860
362Morocco69557940508676644268585659717560
371Morocco968810284626366909195918270647382
323324Morocco55737844596967738969656157656976
331332Morocco67595053433654362959544844444240
355356Morocco56665361605673767258605859636874
381382384Morocco70745454485567616566605252576164
313Poland1911481099682936878711491189690817972
321Poland1411221039686857771631221079589827770
322Poland83624962464945574965585353475150
341Poland1329587707480806780105847775787676
342Poland123767560537353696091706262606561
362Poland161146977776576079601351078370646566
371Poland1901401071071539713310276146118123119128111104
323324Poland16110749616544677282106735857596174
331332Poland11291728480921097210791827985949196
355356Poland83908373707081667685827571747374
381382384Poland150156125107969487937514412910999929185
311Romania288861001007596798078158959290848579
313Romania245317312910710065897911677103112918477
321Romania19523412814315611812715890186168142139134134125
322Romania12811569865678546446104907073636555
341Romania103916623492274158965687130131200175176104
342Romania70837560474539514576736151444545
362Romania746787618892906110076727980908184
371Romania24123112214232577391164119198165196182265211225
323324Romania267126122115786569868817212110586717481
331332Romania911011031061068977755698103105100908070
355356Romania118213901221029410379101141142104106999294
381382384Romania13512814715817911811589157137144161151137107120
311Tunisia91919173616967728491857568666974
313Tunisia97695371558561768573646070677474
321Tunisia76887974747571676081807675747166
322Tunisia50474646484447483448464746464643
341Tunisia605373133747891706562869395818075
342Tunisia8563105711138782717084799690948075
362Tunisia55626656335076413561615246535551
371Tunisia929510985747394956399968977808784
323324Tunisia84889474706869818889857971697380
331332Tunisia8861651071066371935671779292807673
355356Tunisia119637974746361727687727670666570
381382384Tunisia1258973807373611078896807575698085
311Turkey110861181139999708771104106110104898576
313Turkey17612513316012592117133116145139139126111114122
321Turkey79747784777589847376787979818382
322Turkey104908096766570687591898479706871
341Turkey898512211962886465909910910190717373
342Turkey85756477667662695675726973686962
362Turkey80748876617274885981797570697874
371Turkey1122061198317816513410593146136127142159135111
323324Turkey1359796106829697139126109100959592111121
331332Turkey749494125791251059882871049911010310995
355356Turkey65606267498080818563635965698082
381382384Turkey9087107978010483817495979594898979
87
Sheet1
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Sheet2
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Sheet3
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Sheet4
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Sheet5
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Sheet6
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000000000000
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000000
000000
000000
000000
000000
000000
000000
Hungary
Israel
Morocco
Poland
Tunisia
Turkey
Three years moving averages
Aggregate Unit Value Index (US=100)
Trends in the Aggregate Unit Value Index
UVGDPFDI
Bulgaria97.443399433911.811804.9382367134
Croatia86.669797951945.84580..
Czech Rep85.013034711652.152102.4714276791
Egypt69.97008517821212001.1784979105
Hungary76.420984725945.145104.5467629433
Israel93.4966963947161.8161802.758838892
Jordan86.312632302315.415400.3136284947
Morocco65.593335834812.612603.5805659294
Poland74.78976245623838003.6178953648
Romania96.501657693614.114103.4870836735
Slovakia88.517930901236.836800.8478360772
Slovenia90.549774674398.698601.7624932528
Syria8810.510500.446944356
Tunisia70.843458034920.820801.6687250137
Turkey87.34053413923232000.4239555597
0.3128486941-0.0111774955
IndexGNPindexgnp/100
Morocco65.59333583484.343329886265.593335834812.6
Egypt69.97008517824.136504653669.970085178212
Tunisia70.84345803497.169941399570.843458034920.8
Poland74.789762456213.09893140374.789762456238
Hungary76.420984725915.54636332376.420984725945.1
Czech Rep85.013034711617.959324370985.013034711652.1
Croatia86.669797951915.787659427886.669797951945.8
Turkey87.340534139211.030679076287.340534139232
Slovakia88.517930901212.685280937688.517930901236.8
Slovenia90.549774674333.988279903590.549774674398.6
Israel93.496696394755.773871078993.4966963947161.8
USA100100100290.1
0.7207659183
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
GNP Per Capita Index (1997, USA = 100)
Unit Values Index (av. 1995-97, USA=100)
Unit Values and GNP per Capita
Persistency of the technology gap, 7 years lagFrom Barba Navaretti, Schiff and Soloaga, 2006
The firmTrade:Beyond the representative agentStudies by James Tybout and othersSelf selection vs. learning by exporting? What characteristics of the firm strengthen the link between export and productivity?FDI Whats the channel: vertical or horizontal linkages?
Be more specific about exports!Productivity growth declines with exports up to an average 38-48% share, then it risesFrom Barba Navaretti, Tucci and Galeotti, 2002
Export Share in 1999 for a sample of Indian firms (Kernel Density)
EMBED Word.Picture.8
_1102769607.doc
0
.5
1
0
.5
1
Backward linkages matter
Foglio1
Per Capita Industrialization Levels, 1750-1913 (UK in 1900=100)Composition of North-South Trade, 1955 to 1989
1750180018301860188019001913North's Exports to South:
USA49142138691261955197019801989
UK1016256487100115Manufactures (% of total)73787979
Italy88810121726South's Exports to North:
China8664433Fuels (% of total)20336625
India-Pak7663212Other Primary (% of total)74511821
Manufactures (% of total)5161553
Source: Wood (1994), which is based on UNCTAD data and definitions.
OLS with Lagged and Contemporaneous Spillover Variables
Dependent variable: firm's output
Domestic Firms
Backward0.0086*
(0.0051)
Forward0.0001
(0.0027)
Horizontal0.0040***
(0.0014)
Intercept5.2082***
(0.0876)
No. of observations10,216
R20.92
Source: Smarzynska Javorcik (2004)
Foglio1
source: Baldwin and Martin NBER 6904 from Bairoch (1982)
USA
UK
Italy
China
India-Pak
Per Capita Industrilization Levels, 1750-1913 (UK 1900=100)
Foglio2
Foglio3
Third unbundling: tasks within the firmSpitz, 2004, reproduced from Baldwin, Globalisation, the great unbundling(s), 2006
Leads to production fragmentationSource: Oecd, Offshoring and Employment: Trends and Impact, 2007
Joint effect of export and imports mattersFrom Tucci, 2005
Are technological flows still unidirectional?Acquisition of Jaguar and Land Rover by Tata MotorsChairman Tata: his company will not transfer Jaguar and Land Rover production and component sourcing to developing countries
BECOMING AN OUTWARD INVESTOR
China
FDI flows (Million $ and %)
1990-2000
(Annual averages)
2006
Inward
30,104
69,468
Outward
2,195
16,130
Outward/Inward
7,2%
23,2%
Developing countries
Inward and outward stocks (% of GDP)
2000
2006
Inward
9,6%
26,7%
Outward
4,2%
13,9%
Source: Unctad, World Investment Report2007
From Cui and Syed (2007)China: using more domestic inputs in exports
From Cui and Syed (2007)China: and upgrading export sophistication
ConclusionsTechnology transfer strongly affectd by how North/South firms interactUnbundling of production has created extraordinary new opportunities for technology diffusion Technological flows no longer unilateralMany countries or part of countries still excluded
References:Baldwin R., 2006, Globalisation, the great unbundling(s), a report prepared for the Finnish Prime Ministers Office;
Baldwin R. and P. Martin, 1999, Two Waves of Globalisation: Superficial Similarities, Fundamental Differences, NBER Working Paper No. 6904;
Barba Navaretti G., M. Schiff and I. Soloaga, 2006, Weightless Machines and Costless Knowledge: an Empirical Analysis of Trade and Technology Diffusion, in Microfoundations of International Technology Diffusion, edited by B. Hoekman and B. Smarzynska, Washington: World Bank and Plagrave Macmillan;
Barba Navaretti G., M. Galeotti and A. Tucci, 2002, Do Not Get Trapped into Crossing: Indian Firms and Foreign Markets, Centro Studi Luca d'Agliano Development Studies Working Paper No. 170;
Coe D. and E. Helpman, 1995, International R&D Spillovers, NBER Working Paper No. W4444;
Cui L. and M. Syed, 2007, The Shifting Structure of Chinas Trade and Production, IMF Working Paper No. 214;
Oecd, 2007, Offshoring and Employment: Trends and Impact;
Smarzynska Javorcik B., 2004, Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers through Backward Linkages, American Economic Review 94 (3);
Tucci A., 2005, Trade, Foreign Networks and Performance: a Firm-Level Analysis for India, Centro Studi Luca d'Agliano Development Studies Working Paper No. 199;
UNCTAD, 2007, World Investment Report.