North-South trade-related technology diffusion and productivity growth : are small states different? created by Maurice Schiff and Yanling Wang

The economies of small developing states tend to be more fragile than those in large ones. This paper examines this issue in a dynamic context by focusing on the impact of education and North–South trade-related technology diffusion (NRD) on TFP growth in small and large states in the South. The main findings are: (i) TFP growth increases with NRD, education and the interaction between the two; (ii) the impact of NRD, education and their interaction on TFP growth in small states is over three times that for large countries; and (iii) the greater TFP growth loss in small states has two brain–drain related causes: a substantially greater sensitivity of TFP growth to the brain drain, and brain drain levels that are much higher in small than in large states.