Technology Diffusion and Economic Growth in Developing Countries

Standard growth models started by the Solow neoclassical approach and continued by the new growth theory usually work with closed economies and try to find the equilibrium growth rates for the isolated country. However, countries (beyond the exceptions) a re the part of the world economy and thus interact. Models trying to express the world growth rate as endogenous may provide a better approximation to reality and a better framework for the analysis of the mechanics of economic growth. The interactions i mportant for the economic growth refer to a technology diffusion among countries. The investigation of the factors affecting the speed and nature of technological adoption is fundamental for the understanding of productivity and technological differences and thus economic growth of nations. This will be the subject of my project. The specific aim is to investigate economic growth´ possibilities of developing countries by means of technology diffusion. The factors influencing technological diffusion are cl assified and analyzed within three categories: 1) differences in human capital that influence the appropriateness of technologies developed in advanced economies for developing ones. 2) institutional or policy barriers affecting technology adoption 3) i nternational trade which influences technology diffusion Project will have three stages: 1) summary and analysis of literature concerning the topic of endogenous economic growth of open economy. 2) analysis and evaluation of the world data sources suitab le for the investigation of the three mentioned factors of technological diffusion. 3) verification of the endogenous growth models in an open economy with the emphasis on the first two factors of technological diffusion among countries.