Carmela Martín

The Role of International Technology Spillovers in the Economic Growth of the OECD Countries

This paper explores the role of imports as a mechanism of transmission of international technology spillovers and its significance for the growth of the OECD countries. For this purpose we estimate a version of the growth model proposed by Benhabib and Spiegel (1994), which includes two main modifications in order to better specify the nature of international knowledge diffusion. The first is the inclusion of the R&D capital stock into this framework. The second consist of using a direct measurement of international technology spillovers instead of using per capita GDP gap in respect to the leader country as approach to it. Our results reveal that international technology spillovers transmitted through imports have had a favourable influence on the economic growth of the OECD countries. However, they show the predominant role of the domestic human and R&D capital endowments in economic growth.

Determinants of Net Trade Flows in the OECD: New Evidence with Special Emphasis on the Former Communist Members

This study estimates an econometric panel-data model, in order to explore the capacity of some of the hypotheses formulated in recent dynamic models of trade and economic growth to explain the bilateral trade of OECD countries. The study suggests that the larger a countrys endowment of both tangible and intangible (human and technological) capital in relation to that of its trade partners, the higher the export/import ratio of its bilateral trade. It also shows that direct investment enhances the export/import ratio with the host country. The former communist countries reflect only minor differences from the other OECD members. Copyright 2002 by Blackwell Publishing Ltd.

Nominal and Real Convergence

To round off the comparative study of Spain’s main economic variables vis-a-vis those of the other EU countries, in this final chapter of Part I we shall examine whether economic convergence in the European Union has actually advanced since Spain joined the Community. Specifically, Section 7.2 discusses the meaning of the concept ‘economic convergence’ and the most common methods of measuring it. Section 7.3 then explores the process of nominal convergence in Spain in relation to that of its European partners, taking several of the criteria established in the Treaty on European Union, or Maastricht Treaty, as its starting point: price stability and the position of public finances (balance and debt).

Activity, Employment and Unemployment

With high and persistent unemployment rates prevailing in the European Union for so many years – notably higher than in the United States and Japan – studies have sought to explain this phenomenon by examining the idiosyncratic features common to EU economies. They tend to coincide in highlighting, among others, two large groups of factors. The first includes those most directly linked to the peculiarities of the institutional framework, which affect the workings of the labour market itself and the nature of the system of social benefits. The second group encompasses those associated with the productive structure, which determine the capacity of economies to adapt to changes in technology and in international competition.

Direct Investment Flows

International (foreign) direct investment can be broadly defined as the long-term (inward) capital flows used for exercising control of a business activity in a country other than that from which the investment activity originates.1 These international flows of capital are obviously very closely linked to the emergence and development of multinational firms. And, in a way, they are the product of the supranational geographical diversification of firms, either through the creation of new subsidiaries or through holdings in other already existing companies in the host country.

Growth and Structural Changes

We begin the comparative analysis of the development and present situation of the Spanish economy in relation to its European partners by considering GDP per capita. This variable summarizes, in a way, the results of the growth experienced by a country and thus its achievements in terms of economic welfare.

Conclusions: Prospects and Economic Strategies for the Spain of the Euro

This book began with a series of questions regarding the true extent of the Spanish economy’s integration with its European partners – and its progress towards convergence with them – since 1986, when Spain joined the project to build a new, economically integrated Europe, with a common currency, the euro. As noted from the start, the book’s more immediate goal has been to answer these questions as thoroughly and precisely as possible. But in the final instance, beyond shedding light on what these more than 12 years have held for Spain and its partners as they advanced towards a common goal, the book has also sought to provide useful information for the design of a feasible and suitable policy for adapting to the challenges that lie ahead – the deepening (consolidation of the recently created EMU) and the enlargement (accession of the Eastern European countries) of the process of European economic and, most likely, political integration.

Unification of Monetary Policy in Europe

The establishment of economic and monetary union (EMU) marks the culmination of the European integration process that began in the late 1950s under the Treaty of Rome. Despite the lingering uncertainties over the economic implications of EMU membership for the member countries, progress on the theoretical side and the empirical experience of the process shed light on what may lie ahead.

The External Sector

The balance of payments of a country reflects all the current, capital and financial transactions of its residents with the residents of the rest of the world and, by extension, offers a global view of the way and extent to which an open economy achieves external equilibrium. In a sense, it also shows up both the weaknesses and strengths of a country’s productive system, and indeed helps identify some of the consequences of the structural problems afflicting an economy. Thus, balance-of-payments disequilibria, and current-account deficits in particular, are always an important point of reference for macroeconomic policy measures.

Productivity and its Determinants

Spain’s objective of convergence with the Community levels of per capita income can only be achieved if its economic growth is more rapid than that of the rest of its EU partners. To accomplish this goal, one almost indispensable condition is to heighten the efficiency of the use of the factors of production or, more precisely, to increase relative productivity.