Economic growth in the southern European countries. The role of new technology

Abstract

This paper investigates the main causes the recent economic fluctuations in the Southern European Countries. Particularly, we focus on the analysis of the role of new technology in the economic performance of Spain, Portugal, Italy, France and Greece. In order to do this, we differentiate two main channels of economic development boosted by knowledge. Firstly, we consider the process of transferring knowledge and technology through international transactions, as foreign direct investment and imports of capital goods. Secondly, we take into consideration the country-specific economic factors that act both as a source of knowledge and as absorptive capacities to assimilate the new technologies. Two models are estimated in order to study the impact of technology on both the level of individual income and its growth. To do that, we use panel data methodology covering the yearly period from 1996 to 2016. We also provided a robustness analysis to the different estimations. Our results corroborate the conclusions of many of the studies and theories in this field. Specifically, in this study we demonstrate the importance of technology transfer and human capital as determinants of per capita economic level. However, to explain growth, we find other relevant variables such as investment in research and development or the technology gap.