With respect to trade in goods, trade in services is embedded by more technology and knowledge contents, showing a stronger spillover effect. This paper firstly establishes a North-South model of trade in services to analyze the effect of import of trade in services on late developing countries’ technological catching-up; then based on bilateral service trade data with 28 OECD countries from China and India, it measures the knowledge spillover from import of trade in services between the two countries. In addition, it analyzes the impact of trade in services on shorting the technology gap with the developed countries in China and India by using the panel data from 2000 to 2013. Researches demonstrate that import of trade in services helps China to complete the technological catching-up with developed countries; however India’s import of trade in services inhibits the pace of its technological catching-up due to differences in development mode. Therefore, developing countries should encourage services’ opening-up and trade in services; at the same time, they should pay attention to the opening-up order of services and make great efforts to develop knowledge-intensive trade in services.
Imports of Service Trade,Knowledge Spillover and Technological Catching-up in Late Developing Countries: Comparative Analysis of China and India
Journal of Shanghai University of Finance and Economics Vol. 19, Issue 05, pp. 15 - 26 (2017) DOI:10.16538/j.cnki.jsufe.2017.05.002
Cite this article
Chen Qifei, Zhang Weifu. Imports of Service Trade,Knowledge Spillover and Technological Catching-up in Late Developing Countries: Comparative Analysis of China and India[J]. Journal of Shanghai University of Finance and Economics, 2017, 19(5): 15–26.