Cross-Country Technology Diffusion: The Case of Computers

Abstract

After controlling for the above-mentioned variables, we do not Þnd an independent role for the English-(or European-) language skills of the population. The quantitative importance of these Þndings, as well as their theoretical interpretation, is discussed in the concluding section. Data on Computer ImportsThe focus of our analysis is computer investment per worker. We measure aggregate computer investment by imports of computer equipment. Almost all countries in the World report detailed information on their bilateral trade ßows by very disaggregated product or commodity to the United Nations. These detailed trade ßow data have been made available by Robert Feenstra, Robert Lipsey, and Harry Bowen (1997). This paper focuses on imports of automatic data processing machines and units thereof; magnetic and optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s.. In practice, this variable measures imports of assembled computers, as well as imports of key components, such as central processing units, memory chips, storage devices, and peripherals. 3 We focus on the period 1970-1990, which essentially covers the beginning and the coming of age of the computer revolution. Information on computer imports is available on 155 countries, though the country coverage for most of our empirical work will shrink because of limitations in the covariates we use. We express the import data in per-worker terms by dividing aggregate computer imports by the labor force, as measured by the World Bank (1999).We believe computer imports per worker to be an adequate measure of computer investment per worker for a large majority of the countries in the World. Simply put, the computer industry is well known to be highly concentrated internationally, with a handful of countries providing most of the World's computer output. For this reason, computer imports and computer investment are probably very closely associated. A check of this idea based on computer exports per worker gives a somewhat ambiguous response. The percentage of countries in the sample with no reported computer exports falls from 58% in 1970 to 13% in 1990. Hence, a sizeable fraction of the sample appear to be exporting some computersperhaps suggesting the existence of a domestic computer industry, after all -especially in the 3 The computer-import variable is category 752 in the UN data set. It includes the following sub-categories (for which separate data is available): Analogue and hybrid (analogue/digital) data processing machines (7521); Complete digital data processing machines, comprising in the same housing the central processing unit and at least one input unit and one output unit (7522); Complete digital central processing units; digital processors consisting of arithmetical, logical, and control elements (7523); Digital central (main) storage units, separately consigned (7524); Peripheral units, including control and adapting units (connected directly or indirectly to the central unit) (7525); ...

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