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South African Journal of Economic and Management Sciences

On-line version ISSN 1015-8812

Abstract

CHEN, Pei-Pei  and  GUPTA, Rangan. Openness, technological spillovers in the R&D sector and economic growth. S. Afr. j. econ. manag. sci. [online]. 2010, vol.13, n.1, pp. 1-7. ISSN 1015-8812.

Recent studies have pointed out that trade liberalisation leads to technological spillovers, which tend to improve the efficiency of the domestic research and development (R&D) sector, and ultimately boost economic growth. In this paper, we theoretically formalise the above-mentioned relationship between trade openness and growth, via knowledge spillover in the R&D sector. We show that, under certain conditions, an increase in the degree of openness not only enhances growth, but also improves the standard of living. The study, thus, prescribes policies of developing and improving the domestic R&D sector in order to reap the benefits of trade liberalisation.

Keywords : Trade openness; growth; research and development.

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