Emulative Development through Trade Expansions: East Asian Evidence

Abstract:     
We identify East Asian growth as an 'emulative process'. Distilling salient facts from a set of particular cases, we construct an example to capture the essence of such technology transfer, where the government of a developing economy may provide adequate incentive for the firms of a developed economy to invest. The presence of the latter allows agents in the developing economy to acquire enough information to launch their own business but not enough to outcompete the investor. The formulation is information-theoretic and in the form of a multi-stage game. We relate our findings to recent views on the cause and future of East Asian growth.

Keywords: Development, Foreign investment, Information, Technological diffusion, Technology transfer, Trade

JEL Classification: D83, F13, F21, O30, O53

Accepted Paper Series