Essays on quality requirements, learning by doing and product life cycle issues in developing countries

This dissertation consists of three essays that explore the impact of quality requirements and learning by on technological upgrading and economic performance of developing countries. While unique in contribution, the essays are linked by their focus on technological change in developing countries.; Chapter two develops a theoretical model of linkages between multinational firms and local producers of intermediate goods. The analysis shows that when linkages exist benefits from improved quality of the intermediate goods can spill over to the final producers in the host country. In addition, innovative activities of local producers might be induced as a result of higher demand for the product and obligatory quality improvements.; Chapter three develops a theoretical framework, where products go through a standard life cycle and product quality is driven by cumulative production experience. According to the model, learning-by-doing influences the nature of cross-country outsourcing activity, and hence, the contents of trade. Multinational enterprises contract out the production of relatively mature, standardized products to low-cost producers with relatively little production experience, and those of more recently developed and non-standard products to producers with relatively more experience. The model is then tested empirically on the significance of learning in the variation of export content of developing countries.; Chapter four of the thesis extends the framework developed in Chapter three to examine the significance of production experience in the patterns of specialization and trade flows between countries during the product life cycle. Two alternative measures of production experience—learning from exporting and learning from producing manufacturing goods—were tested. The results show that both measures have significant explanatory power in explaining the patterns of specialization and export contents of different countries, though learning from exporting manufacturing goods seem to be more robust to alternative specifications.