Does Promoting High Tech Products Spur Development? - econ la psu 2025

The document explores the relationship between promoting high-tech products and economic development, focusing on the learning mechanisms that drive long-term growth in developing countries. It critiques existing theories by Lucas, Krugman, Stokey, and Young, which suggest that concentrating resources on high-end goods can enhance productivity through learning by doing. Using plant-level data from Colombia and Morocco, the authors analyze technological sophistication and productivity growth rates associated with different products. The findings indicate that while both countries became more technician-intensive, most productivity gains stemmed from within-industry improvements rather than shifts towards high-end producers. The study concludes that promoting high-tech industries may not automatically lead to increased productivity growth as previously theorized.