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

Date

2020-09-01

Advisors

Journal Title

Journal ISSN

ISSN

Volume Title

Publisher

European Journal of Economics and Economic Policies: Intervention

Type

Article

Peer reviewed

Yes

Abstract

In the balance-of-payments-constrained growth model literature, income elasticities (IEs) are considered as the crucial element determining a country’s long-run growth rate. Although the extant literature accepts that technology matters for IEs magnitude, explanations linking technology and IEs 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 IEs 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 IEs over the 1980–1995 period. Our empirical results suggest a link between the level of NIS development and the size of the IEs.

Description

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.

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Citation

Leone, V. et al. (2020) Technological progress, non-price factors competitiveness, and changes in trade income elasticities: empirical evidence from South Korea and Hong Kong. European Journal of Economics and Economic Policies: Intervention.

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Research Institute

Finance and Banking Research Group (FiBRe)