Trade in Capital Goods

By J. Eaton, Samuel Kortum. 2001

760 citations recorded by the source corpus.

Innovative activity is highly concentrated in a handful of advanced countries. These same countries are also the major exporters of capital goods to the rest of the world. We develop a model of trade in capital goods to assess its role spreading the benefits of technological advances. Applying the model to data on production and bilateral trade in capital equipment, we estimate the barriers to trade in equipment. These estimates imply substantial differences in equipment prices across countries. We attribute about 25 percent of cross-country productivity differences to variation in the relative price of equipment, about half of which we ascribe to barriers to trade in equipment.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/175c44c75d6779320e076ec7cf7ad8dabcabf455

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In Economics and Econometrics

Citations in the corpus

Gravity Equations: Workhorse,Toolkit, and Cookbook (2013, neutral): “Head and Mayer (2000) and Eaton and Kortum (2002) normalize bilateral flows Xni by trade with self21 (Xnn) for a given industry/year, delivering a ratio we call the odds specification:”
A Spatial Theory of Trade (2005, background): “Equations ( 9 )-(11) imply that if the relative price of IGs is above pm the region”
The Social Impact of Globalization in the Developing Countries (2006, neutral): “…because of the role they play in contributing to capital upgrading and more generally to economic growth in developing countries (Xu and Wang, 2000; Eaton and Kortum, 2001; Mazumdar, 2001), and because they originate the so-called “skill-enhancing trade” (see Robbins, 1996 and 2002; Barba…”
The Decision to Import Capital Goods in India : Firms’ Financial Factors Matter (2012, neutral): “See Eaton and Kortum (2001) for a discussion on the sources of costs of trading capital equipment across countries.”
FDI as an Outcome of the Market for Corporate Control: Theory and Evidence (2008, methodology): “Fin = exp[Oi + In − θ1 ln din + θ2Langin + θ3ToColyin + θ4FromColyin + (θ5uin + ln ηin)] (16) (11)We experimented with dividing distance into six categories and using category dummy variables as in Eaton and Kortum (2002) but found that the parsimonious linear-in-logs approach provides a slightly be”
Growth Theory through the Lens of Development Economics (2004, neutral): “The relationship between investment rate and income per capita is much less strong when both of them are expressed in nominal terms rather than in PPP terms (Eaton and Kortum (2001); Restuccia and Urrutia (2001) and Hsieh and Klenow (2003)).”
Trade in Intermediate Goods and Services (2009, background): “According to Eaton and Kortum (2001), 25% of productivity differences among countries are explained by differences in the relative price of capital equipment.”
The Gains from Market Integration (2015, background): “But in models in which trade contributes new capital equipment (Eaton & Kortum 2001) or new ideas (Alvarez et al. 2013), it is natural to expect (at least in the short run, before a long-run steady state is reached) that, although a reduction in trade barriers would raise GDP, an increase in trade…”