Abstract
Few, if any, studies have examined the dual relationships between integration of developing countries into world technology markets and total factor productivity. This study uses a panel of 18 emerging markets and another of 20 developing economies to examine the bidirectional causal relationships between the growth rates of low, medium, and high technology exports, which represent integration into the world technology markets, and total factor productivity growth rates or productivity. The study uses data from 1990 to 2019 and the Granger causality panel data approach. Our empirical results confirm the following: First, there is a dual relationship between integration into the three world technology markets and total factor productivity growth rates at the level of both panels. At the country level, integration into the three world technology markets is the cause of productivity growth in emerging markets, but not in developing economies. Moreover, integration into higher technology markets leads to productivity gains in more emerging markets than integration into lower technology markets. On the other hand, total factor productivity growth rates does not cause the integration of emerging and developing countries into the three world technology markets. This study has two important policy implications. First, policy makers in developing countries need to develop the external technology sectors as key instruments to increase domestic productivity. Second, the accumulation of knowledge and know-how, without using them to integrate into world markets, would have little or no impact on productivity or sustaining economic growth in developing countries.
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Source: Author’s calculations based on UN Comtrade database
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Acknowledgements
To a good and honorable man, Ahmad Jahjah Abou Hamia, my father. May God have mercy on your soul and reward you with eternal peace.
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I contributed to the study conception and design. Material preparation, data collection and analysis were performed by Mohamad A. Abou Hamia. I read and approved the final manuscript.
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Appendix: SITC revision 2 classification of low, medium, and high technology
Appendix: SITC revision 2 classification of low, medium, and high technology
Code | Low technology sections, divisions, or groups |
|---|---|
61 | Leather,leather manuf.,n.e.s.and dressed furskisg |
642 | Paper and paperboard,cut to size or shape |
650 | UN Special Code |
651 | Textile yarn |
652 | Cotton fabrics,woven |
654 | Textil.fabrics,woven,oth.than cotton/man-made fibr |
655 | Knitted or crocheted fabrics |
656 | Tulle,lace,embroidery,ribbons,& other small wares |
657 | Special textile fabrics and related products |
658 | Made-up articles,wholly/chiefly of text.materials |
659 | Floor coverings,etc |
665 | Glassware |
666 | Pottery |
670 | UN Special Code |
673 | Iron and steel bars,rods,angles,shapes & sections |
674 | Universals,plates and sheets,of iron or steel |
675 | Hoop & strip,of iron/steel,hot-rolled/cold-rolled |
676 | Rails and railway track construction material |
677 | Iron/steel wire,wheth/not coated,but not insulated |
679 | Iron & steel castings,forgings & stampings;rough |
69 | Manufactures of metal,n.e.s |
82 | Furniture and parts thereof |
83 | Travel goods,handbags and similar containers |
84 | Articles of apparel and clothing accessories |
85 | Footwear |
890 | UN Special Code |
893 | Articles of materials described in division 58 |
894 | Baby carriages,toys,games and sporting goods |
895 | Office and stationery supplies,n.e.s |
897 | Jewelry,goldsmiths and other art. of precious m |
898 | Musical instruments,parts and accessories |
899 | Other miscellaneous manufactured articles |
266 | Synthetic fibers suitable for spinning |
267 | Other man-made fibers suitable.for spinning & waste |
512 | Alcohols,phenols,phenol-alcohols,& their derivat |
513 | Carboxylic acids,& their anhydrides,halides,etc |
533 | Pigments,paints,varnishes & related materials |
550 | UN Special Code |
553 | Perfumery,cosmetics and toilet preparations |
554 | Soap,cleansing and polishing preparations |
56 | Fertilizers,manufactured |
57 | Explosives and pyrotechnic products |
58 | Artif.resins,plastic mat.,cellulose esters/ethers |
590 | UN Special Code |
591 | Disinfectants,insecticides,fungicides,weed killers |
598 | Miscellaneous chemical products,n.e.s |
599 | UN Special Code |
653 | Fabrics,woven,of man-made fibers |
671 | Pig iron,spiegeleisen,sponge iron,iron or steel |
672 | Ingots and other primary forms,of iron or steel |
678 | Tubes,pipes and fittings,of iron or steel |
711 | Steam & other vapour generating boilers & parts |
713 | Internal combustion piston engines & parts |
714 | Engines & motors,non-electric |
72 | Machinery specialized for particular industries |
73 | Metalworking machinery |
74 | General industrial machinery & equipment,and parts |
762 | Radio-broadcast receivers |
763 | Gramophones,dictating,sound recorders etc |
772 | Elect.app.such as switches,relays,fuses,plugs etc |
773 | Equipment for distributing electricity |
775 | Household type,elect.& non-electrical equipment |
78 | Road vehicles (incl. air cushion vehicles |
791 | Railway vehicles & associated equipment |
793 | Ships,boats and floating structures |
81 | Sanitary,plumbing,heating and lighting fixtures |
872 | Medical instruments and appliances |
873 | Meters and counters,n.e.s |
880 | UN Special Code |
882 | Photographic & cinematographic supplies |
883 | Cinematograph film,exposed-developed,neg.or pos |
884 | Optical goods,n.e.s |
885 | Watches and clocks |
95 | Arms,of war and ammunition therefor |
524 | Radio-active and associated materials |
54 | Medicinal and pharmaceutical products |
712 | Steam & other vapour power units,steam engines |
716 | Rotating electric plant and parts |
718 | Other power generating machinery and parts |
75 | Office machines & automatic data processing equip |
761 | Television receivers |
764 | Telecommunications equipment and parts |
770 | UN Special Code |
771 | Electric power machinery and parts thereof |
774 | Electric apparatus for medical purposes,(radiology) |
776 | Thermionic,cold & photo-cathode valves,tubes,parts |
778 | Electrical machinery and apparatus,n.e.s |
792 | Aircraft & associated equipment and parts |
871 | Optical instruments and apparatus |
874 | Measuring,checking,analyzing instruments |
881 | Photographic apparatus and equipment,n.e.s |
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Abou Hamia, M.A. The integration of developing countries into world technology markets: cause or effect of total factor productivity?. Qual Quant 58, 879–902 (2024). https://doi.org/10.1007/s11135-023-01671-2
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DOI: https://doi.org/10.1007/s11135-023-01671-2