National Concentration of High‐tech Products: The Second Great Divergence?

Abstract

AbstractBased on the product‐country level trade data from 2004 to 2017, as well as the High‐Tech Products Catalog from the US Census Bureau, this paper examines empirically the current phenomenon of “national concentration” in high‐tech exports. The results show that the phenomenon of “national concentration” not only exists but also tends to be self‐reinforcing. Compared with other products, the exports of high‐tech products tend to be concentrated in certain countries, and this concentration trends were further strengthened after the global financial crisis of 2008–2009. The national concentration of R&D activities may be one of the important causes of the national concentration of high‐tech products. This pattern remains robust when we further use the value‐added export data and different definitions of high‐tech products. We argue that the phenomenon of “national concentration” of high‐tech exports may herald the arrival of the “Second Great Divergence” – the divergence between innovative and manufacturing activities – in the global economy.