TITLE:
Some Properties of the Technology Gap between Leading and Lagging Regions
AUTHORS:
Amitrajeet A. Batabyal, Peter Nijkamp
KEYWORDS:
Economic Growth; Lagging Region; Leading Region; Technology Gap
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.1,
February
12,
2014
ABSTRACT:
We theoretically
analyze some properties of the technology gap between leading and lagging
regions studied recently by Batabyal and Nijkamp [1]. New technologies are
developed in the leading region. The lagging region does not conduct research
and development (R & D) but uses the leading region’s technology with a
temporal gap of て> 0 time periods. We first use a model with a single factor of
production, human capital, to study the relationship between the technology gap て and the difference in the growth rates of
output per human capital unit in the leading and in the lagging region. Next,
we introduce a second factor of production, physical capital, and use a variant
of the Solow growth model to shed light on two issues. We show that despite the
existence of the technology gap, on the balanced growth path (BGP), the
physical to effective human capital ratio is identical in both regions.
Finally, we demonstrate that introducing a second factor of production does not alter the relationship between the technology gap て and the difference in the growth rates of
output per human capital unit in the two regions.