Abstract

http://ssrn.com/abstract=1945981
 
 

References (22)



 


 



Why Doesn't Technology Flow from Rich to Poor Countries?


Harold L. Cole


University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Jeremy Greenwood


University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Juan M. Sánchez


Federal Reserve Banks - Federal Reserve Bank of Saint Louis

December 24, 2014


Abstract:     
What determines the technology that a country adopts? While many factors affect technological adoption, the efficiency of the country's financial system may also play a significant role. To address this question, a dynamic contract model is embedded into a general equilibrium setting with competitive intermediation. The ability of an intermediary to monitor and control the cash flows of a firm plays an important role in the technology adoption decision. Can such a theory help to explain the differences in total factor productivity and establishment-size distributions across India, Mexico, and the United States? A quantitative illustration suggests the answer is yes.

Number of Pages in PDF File: 83

Keywords: Costly cash-flow control; costly state verification; dynamic contract theory; economic development; establishment-size distributions; finance and development; financial intermediation; India, Mexico, and the United States; monitoring; productivity; self-finance; technology adoption; ventures

JEL Classification: D92, E13, G24, O11, O16


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Date posted: October 20, 2011 ; Last revised: April 7, 2015

Suggested Citation

Cole, Harold L. and Greenwood, Jeremy and Sánchez, Juan M., Why Doesn't Technology Flow from Rich to Poor Countries? (December 24, 2014). Available at SSRN: http://ssrn.com/abstract=1945981 or http://dx.doi.org/10.2139/ssrn.1945981

Contact Information

Harold L. Cole (Contact Author)
University of Pennsylvania - Department of Economics ( email )
3718 Locust Walk
436 McNeil
Philadelphia, PA 19104
United States
215-898-7788 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Jeremy Greenwood
University of Pennsylvania - Department of Economics ( email )
160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-1505 (Phone)
HOME PAGE: http://jeremygreenwood.net
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Juan M. Sanchez
Federal Reserve Banks - Federal Reserve Bank of Saint Louis ( email )
411 Locust St
Saint Louis, MO 63011
United States
Feedback to SSRN


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