CEPII, Recherche et Expertise sur l'economie mondiale
Trade Liberalization, Democratization and Technology Adoption

Matteo Cervellati
Alireza Naghavi
Farid Toubal

 Points clés :
  • Study the role of trade liberalization and democratization for technology adoption
  • Use panel data on technology adoption for 1980-2000 at the sector level
  • Exploit within-country variation & timing of institutional changes
  • Trade Openness and Democratization are complementary for technology adoption
  • Openness may hamper technology adoption if not coupled with democratization

 Résumé :
We study the role of trade liberalization, democratization and their interaction for technology adoption. A general equilibrium theory with heterogeneous skills predicts a complementarity between trade and political regimes. Openness should accelerate technology adoption if coupled with democratization but may lead to a slowdown if these regime changes are imbalanced. We use panel data on technology adoption at the sectoral level for the period 1980-2000. We exploit within country variation and the heterogenous timing of openness and democratization. The results document the existence of a positive interaction between these institutional changes for technology adoption.

 Mots-clés : Trade Openness | Democratization | Political Economy theory | Technology Adoption | Sector Level Data | Cross-Country Analysis

 JEL : F16, J24, O14, P51, F59
CEPII Working Paper
N°2014-08, March 2014

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