International Technology Diffusion and Economic Growth — A Theoretical Analysis on Market Structure

Abstract

This paper analyzes equilibrium with perfect international technology diffusion. The authors argue that if there are no large countries, economic growth rate in the world will converge with perfect international technology diffusion; otherwise, economic growth rate in the world will converge to the large countries’. Moreover, we considered the effect of market structure on the diffusion. Market structure can influence the long-term equilibrium growth rate by influencing international technology diffusion. The best point of market structure that is beneficial to diffusion can be derived in the interval, where the competition factors and monopoly factors are relatively balanced; in the left side of the best point, it will promote technology diffusion, and in the right side, it will impede technology diffusion.