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We propose to measure economic convergence for three emerging countries: Brazil/China/India. A first result is that the higher the level of productivity in an industry, the lower its growth rate, showing a convergence to the productivity frontier represented by the U.S. A first contribution is to propose a new definition of convergence, based on labor productivity vis-à-vis the technological frontier. A second contribution is that we use industry-level data to measure convergence. In doing so, we aim to reduce the biases of using trade data collected at the national level as in previous models.

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The emergence of a giant like China changes the landscape. The potential localization of multinational companies' R&D centers into emerging countries changes the analytical perspective. This phenomenon moves the knowledge frontier and creates a real paradigm change in terms of innovation and technology transfer. On the one hand, we confirm the global trend of knowledge sources implied in previous studies and we demonstrate that multinationals might now choose emergent countries as a strategic place to externalize R&D. On the other hand, we go further by empirically showing the phenomena of reverse innovation and reverse technology transfer in the pharmaceutical sector.

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