Adoption of new technology by a lagging country: Leapfrogging or no leapfrogging?
The emergence of a new and superior technology presents a technologically lagging country with an opportunity to leapfrog the leading country. The adoption of new technology, however, does not guarantee that the lagging country will leapfrog the leader. Under certain conditions firms in the lagging country are not able to exploit the full potential of the new technology. Consequently, the adoption only narrows the productivity gap between the two countries. However, the lagging country can ensure leapfrogging by temporarily closing its door to the imports from the leading country.