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Technological progress, non-price factors competitiveness, and changes in trade income elasticities: empirical evidence from South Korea and Hong Kong

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journal contribution
posted on 13.08.2020, 15:00 authored by Marco Flávio Cunha Resende, Vitor Leone, Daniela Almeida Raposo Torres, Simeon ColemanSimeon Coleman
In the Balance of Payments Constrained Growth model literature, income elasticities (IE) are considered as the crucial element determining a country’s long run growth rate. Although the extant literature accepts that technology matters for the IE magnitude, explanations linking technology and the IE magnitude are limited. In this paper, we make use of the National Innovation System (NIS) concept from the Evolutionary School to explain the channels through which the size of a country’s IE is influenced by the level of development of its NIS, which in turn, is a channel through which the non-price competitiveness factors work. Additionally, we empirically test the hypothesis that the catch-up allowed by NIS developments achieved in South Korea and Hong Kong improved their IE over the 1980-95 period. Our empirical results suggest a link between the level of NIS development and the size of the IE.

Funding

CNPq (The Brazilian federal research funding agency)

History

School

  • Business and Economics

Department

  • Economics

Published in

European Journal of Economics and Economic Policies: Intervention

Volume

18

Issue

1

Pages

29-54

Publisher

Edward Elgar

Version

AM (Accepted Manuscript)

Rights holder

© The Authors

Publisher statement

The definitive, peer reviewed and edited version of this article is published in European Journal of Economics and Economic Policies: Intervention 18, 1, 29-54, 2021. The definitive published version is available at https://doi.org/10.4337/ejeep.2020.0071.

Acceptance date

07/08/2020

Publication date

2020-09-30

Copyright date

2020

ISSN

2052-7764

eISSN

2052-7772

Language

en

Depositor

Dr Simeon Coleman. Deposit date: 10 August 2020