DP8541 Long-Term Barriers to the International Diffusion of Innovations

Author(s): Enrico Spolaore , Romain Wacziarg

Publication Date: August 2011

Keyword(s): genetic distance , technological adoption , technological frontier , total factor productivity

JEL(s): F43 , O33 , O57

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP8541.asp

We document an empirical relationship between the cross-country adoption of technologies and the degree of long-term historical relatedness between human populations. Historical relatedness is measured using genetic distance, a measure of the time since two populations’ last common ancestors. We find that the measure of human relatedness that is relevant to explain international technology diffusion is genetic distance relative to the world technological frontier (“relative frontier distance”). This evidence is consistent with long-term historical relatedness acting as a barrier to technology adoption: societies that are more distant from the technological frontier tend to face higher imitation costs. The results can help explain current differences in total factor productivity and income per capita across countries.