WHAT ROLE FOR 'LEARNING'? A NORTH-SOUTH TALE OF ENRICHMENT EFFECT

Abstract

Drawing on the asymmetric growth experiences of the advanced, emerging, and the underdeveloped economies, this paper explores the scope of learning effects via North-South trade by offering quantitative measures of coefficient of differences in trade. Constructing technology appropriation parameters and indigenous and foreign-sourced R&D via trade-mediated spillover to the recipients, it shows that North-South trade flows could lead to product sophistication of exports via enhancement of technology frontier. This is enrichment effect. Aided by the right adoption of parameters such as absorptive capacity, innovation capability and technological upgrading, knowledge flow transmits enrichment benefits in a multi-speed world, facilitates productivity improvements, alters level of product sophistication, and enables narrowing the North-South technology gap.