TY  - JOUR
AU  - Eaton,Jonathan
AU  - Kortum,Samuel
TI  - Trade in Capital Goods
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8070
PY  - 2001
Y2  - January 2001
UR  - http://www.nber.org/papers/w8070
L1  - http://www.nber.org/papers/w8070.pdf
N1  - Author contact info:
Jonathan Eaton
Department of Economics
Penn State University
608 Kern Graduate Building
University Park, PA 16802-3306
Tel: (814) 865 - 8871
Fax: (814) 863 - 4775
E-Mail: jxe22@psu.edu

Samuel S. Kortum
Department of Economics
Yale University
P.O. Box 208264
New Haven, CT 06520
Tel: 773/702-8251
Fax: 773/702-8490
E-Mail: kortum@uchicago.edu
AB  - Innovative activity is highly concentrated in a handful of advanced countries.  These same countries are also the major exporters of capital goods to the rest of the world.  We develop a model of trade in capital goods to assess its role spreading the benefits of technological advances.  Applying the model to data on production and bilateral trade in capital equipment, we estimate the barriers to trade in equipment.  These estimates imply substantial differences in equipment prices across countries.  We attribute about 25 percent of cross-country productivity differences to variation in the relative price of equipment, about half of which we ascribe to barriers to trade in equipment.
ER  -