A Study On Technology Spillover Effect Of International Trade

International trade plays an important role as a channel for technology transfer and diffusion, and international technology spillover has a great impact on the technological progress of an economy. Developing economies undertake little R&D so the effect of technology spillover from international trade on them will be more significant. This paper systematically analyze the mechanism and factors of international technology spillover from trade on the basis of the earlier theoretical and empirical research, then make a further exploration for the relation between trade and growth in developing economies. It finds that through imports of capital goods and technology, a developing economy can boost its productivity, have larger stocks of knowledge and improve its innovation mechanism, which make it possible to catch-up.This paper improves the Coe & Helpman(1995) model and examines the impact of imported technologies on productivity for a sample of developing economies. It also uses panel data to investigate the effect of technology spillover on the east, middle and west area of China. The results indicate that technology spillover of international trade generally has positive contributor to technological progress of developing economies, but the effect which depends on the different conditions of different countries is not balance. Developing economies cannot realize the advantage of international technology spillover unless the technology and human capital level reach a threshold. As for China, in order to make full use of international technology spillover from trade, it is significant to strengthen the capability of digesting and absorbing advanced technology and implement independent innovation strategy to avoid dependence on foreign technologies.