What Makes a Country Socially Capable of Catching Up?

Abstract

In this study we test whether social capability promotes catching up, the hypothesis that there is technological spillover from leaders to followers. A simple model that captures the hypothesized interaction is presented and tested on an extended sample of countries. The stock of human capital and the degree of integration into the world economy are used to measure social capability. Both measures are important in determining the degree to which the catching-up potential is realized. We also find an independent effect of increased trade intensity and trade regime on productivity growth.

Keywords: catching up, convergence, human capital, International trade, social capability, technological spillover, technology gap

JEL Classification: O41, O47