Technological Convergence and Trade Patterns



wiiw Working Paper No. 19,

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Casual evidence suggests that emerging and developing countries are often gaining market shares in world exports in technology-intensive sectors in the course of development. On the other hand textbook trade theory would suggest that these countries specialize in lower-tech industries. The reason for this is the assumption that the technology gap in these industries is lower and thus under the further assumption of equal wage rates across industries the developing countries have a comparative advantage in the lower-tech industries. In this paper we take a dynamic view on development and trade integration and distinguish three types of catching-up processes (the 'continuous convergence approach', the 'climbing up the ladder approach' and the 'jumping-up approach'). Using data for 25 countries and 32 industries we empirically analyse the different patterns of catching up over the period from 1981 to 1997. Further we discuss linkages between technological convergence, dynamics of comparative advantage and trade patterns.


Keywords: catching up, dynamics of comparative advantage, trade and technology

JEL classification: F14, L6, O10, O14, O30, O41

Countries covered: non specific

Research Areas: International Trade, Competitiveness and FDI, Sectoral studies