Time Series Tests of Structural Change among Innovation and Trade Liberalization in Mexico
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Time Series Tests of Structural Change among Innovation and Trade Liberalization in Mexico Vicente German-Soto & Luis Gutiérrez Flores
Received: 1 May 2010 / Accepted: 23 June 2010 / Published online: 15 July 2010 # Springer Science+Business Media, LLC 2010
Abstract This work analyzes if there has been a structural change in the flow of patents in Mexico, as a consequence of institutional reforms and economic policies. To explore the structural change hypothesis, time series models and unit root tests are used in both series of patents applications for the country’s residents and nonresidents. The analysis indicates that misleading conclusions can be obtained if the presence of structural breaks is not taken into account. Results show until two structural breaks in each series that are widely linked with changes in the economic activity. However, the structural changes occurred in each series, disagree in the estimated breakpoint, for the residents’ series it seems to occur before of the trade openness, meanwhile for the nonresidents the two break points are estimated after the trade openness. Intuitively, innovation activities become more important with the arrival of multinationals as a consequence of the liberal reforms. Our findings about the presence of two structural breaks characterizing the patents series would be indicating that the Mexican economy has experienced a process of technology learning due to the trade reforms implemented since the 1980s, a result in concordance with the theories that sustain that trade liberalization promotes economic growth. Keywords Innovation . Structural change . Patents . Trade liberalization . Mexico JEL Code C22 . F43 . O32
V. German-Soto (*) Facultad de Economía, Universidad Autónoma de Coahuila, Unidad Camporredondo, Edificio “E”, Planta Baja, 25280 Saltillo, Coahuila, Mexico e-mail: [email protected] L. Gutiérrez Flores Centro de Investigaciones Socio-Económicas (CISE), Universidad Autónoma de Coahuila, Unidad Camporredondo, Edificio “S”, Planta Alta, 25280 Saltillo, Coahuila, Mexico e-mail: [email protected]
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J Knowl Econ (2010) 1:219–237
Introduction When the new growth theory incorporated technical progress as an endogenous variable, a door was being opened. Some important considerations have walked through that door, for instance, human capital, research and development (R&D) expenditures carried out by firms, and technical change can all be summed up to explain why advanced economies grow beyond considering labor force and capital allocation efficiency. A superior ability to explode the new technology is required [27] at the same time that two important trends in the world economy are reinforcing: first, technological innovations are becoming an ever more important contributor to economic well-being; second, the nations in the world economy are becoming increasingly open and increasingly interdependent. Recent economic history has registered two stylized facts. First, growth in per capita income has been sustained at positive and appare
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