The role of technology spillovers in convergence
Abstract
Purpose
The purpose of this paper is to evaluate the role of human capital technology spillovers across countries in converging their growth rates.
Design/methodology/approach
This paper develops a closed form mathematical endogenous growth model and applies it to a small open economy using simulation and calibration techniques.
Findings
The paper finds that human capital technology spillovers play an important role in convergence in growth rates across countries regardless of tax policy and that there will be non‐convergence in levels if saving rates are differentially distorted across countries because of taxes. In addition, the exploration of the optimal tax reveals that such a structure is a consumption tax.
Research limitations/implications
This paper implies that higher levels of human capital are important in attaining higher levels of per capita income.
Originality/value
This paper shows that some implications for the endogenous growth model are equivalent to those from the Solow model. This implies that some empirical tests commonly used will not resolve which model is more appropriate.
Keywords
Citation
Junaid Khawaja, M. and Azid, T. (2010), "The role of technology spillovers in convergence", Humanomics, Vol. 26 No. 1, pp. 53-64. https://doi.org/10.1108/08288661011024995
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited