Kiel Working Papers, Kiel Institute for World Economics
No 1451:
Can trade really hurt? An empirical follow-up on Samuelson's controversial paper
Jürgen Bitzer, Holger Görg and Philipp Schröder
Abstract: This paper investigates Samuelson's (JEP, 2004) argument
that technical progress of the trade partner may hurt the home country. We
illustrate this prospect in a simple Ricardian model for sitations with
outward knowledge spillovers. Within this framework Samuelson's "Act II"
effects may occur. Based on industry level panel data for seventeen OECD
countries for the period 1973 to 2000 we show econometrically that the
outflow of domestic knowledge via exports or FDI may have a negative impact
on industry output in the home country. This is particularly so when
exporting to technological less advanced oountries and, more specifically,
China
Keywords: international R&D spillovers, outward foreign direct investment, export driven spillovers; (follow links to similar papers)
JEL-Codes: F10,; F11,; F14,; O30; (follow links to similar papers)
35 pages, September 2008
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