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.

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International Economic Journal
Norman Paterson School of International Affairs

Schiff, M. (Maurice), & Wang, Y. (2013). North-South Trade-related Technology Diffusion and Productivity Growth: Are Small States Different?. International Economic Journal, 27(3), 399–414. doi:10.1080/10168737.2012.660180