The convergence of nations: Three papers on international growth

This dissertation is composed of three chapters which explore the relationship between technology diffusion and international growth, with a focus on understanding the nature of productivity convergence among nations. The premise of “convergence” is that poor countries should grow faster than rich ones, and will rise to the global productivity frontier. One of the underlying causes is that less-developed countries have what has been called an “advantage of backwardness” in borrowing technology from abroad.; However, empirical research using world data for a large sample of countries seems to indicate a divergence of economies into stratified clubs. But convergence, if it is happening, is a long-term process. These three papers take a careful look beyond representative-country growth models and develop an approach to multinational growth from a broader perspective.; The first chapter is a literature review. In addition to a survey of recent research from the economics literature, I survey the literature on innovation diffusion. The chapter also includes case studies, which are highly suggestive of long-term convergence. The paper also considers the theoretical link between trade flows and growth, the nature of technology embodied in capital, as well as the influence of geography.; The second chapter offers new econometric evidence incorporating technological diffusion into empirical tests for convergence. By broadening the notion of leadership to include regional leader countries and regional growth effects, this paper introduces a set of new explanatory variables to cross-country growth regressions. They have substantial explanatory power and also prove robust when incorporated in the augmented Solow growth model, specifically against measures of human capital. Empirical results suggest technology diffusion is driving a more complex pattern of convergence than is traditionally considered.; The third chapter offers a model of multinational growth, which explores the implications for convergence if growth rates are following a diffusion pattern. A model for a diffusion matrix is presented, analyzed and numerically simulated. The results of the empirically-based simulations based on bilateral trade flows and geographic distance indicate that short-run divergence trends are part of along-term global convergence process.