Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5055873 | Economic Modelling | 2010 | 13 Pages |
Abstract
The paper develops a North-Middle-South model to formulate a middle economy that plays catch-up via imitative R&D to acquire newer technologies from a higher-wage innovative forerunner, while playing “reverse catch-up” via outbound FDI to transfer older technologies to a lower-wage follower. A critical policy dilemma facing the middle economy is how to balance its R&D-driven technology inflows against its FDI-driven technology outflows. Numerical simulations are used for dynamic welfare analysis. This paper finds that tightening FDI permits the middle economy to keep a lower saving rate without weakening its ability to acquire newer technologies in the long run.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Hwan C. Lin,