Complexity, tacit knowledge and the scope for technological catch‐up

Abstract

AbstractWe study the determinants of sectoral patterns of technological catch‐up of emerging economies. In particular, we test the hypotheses that technological catch‐up is slower in tacit knowledge‐intensive sectors, operationalised by measures of complex task intensity, in sectors with a high skill intensity, with a high degree of export sophistication, and higher income elasticity. Employing trade data from United Nations Comtrade and production data from the United Nations Industrial Development Organization (UNIDO) between 1960 and 2000 covering manufacturing sectors, we find that catch‐up is slower in more tacit knowledge‐intensive sectors, as well as in skill‐intensive and export sophisticated sectors. With more recent Global Trade Analysis Project (GTAP) data from 1997 to 2011, we find instead that catch‐up is faster in more tacit knowledge‐intensive manufacturing sectors, whereas catch‐up is slower in more tacit knowledge‐intensive services sectors. We discuss three potential explanations for the changing association of catch‐up with tacit knowledge intensity.