Crecimiento de los países desarrollados: ¿qué factores influyen?

Autores y e-mail de la persona de contacto: Sofía Jiménez Calvo (sjimenez@unizar.es), Raquel Langarita Tejero Departamento: Análisis económico Universidad: Universidad de Zaragoza. Área Temática: Crecimiento, convergencia y desigualdades territoriales. Resumen: Parece existir un cierto acuerdo, entre los economistas, sobre los factores que históricamente han podido influir en las diferencias que se observan entre el crecimiento de los países desarrollados y el crecimiento de los países en vías de desarrollo. Sin embargo, no está tan claro que elementos explican las diferentes sendas de crecimiento de los países desarrollados, siendo las diferencias entre ellos más visibles desde la actual crisis. Este es el objetivo de este trabajo, tener una visión multirregional del crecimiento de los países desarrollados, siendo la acumulación de capital, las relaciones entre países y el gasto en I+D clave en nuestro estudio. Así, en primer lugar se realizará un análisis descriptivo de las tablas multirreginales WIOT, las cuales están disponibles entre 1995 y 2011. Después nos centramos en el gasto de I+D en las distintas economías y el efecto spillover que este gasto tiene en las mismas, abordándolo desde dos perspectivas, una en cantidades y otra en valores, con el objetivo de comparar los resultados obtenidos a través de ambas vías. Palabras Clave: tablas multirregionales, efectos spillover, crecimiento económico, I+D.

1. Introduction

There is a certain consensus in economic literature about the factors that have

influenced in historical differences in growth rates observed between developed and

developing countries. However, it is less clear what elements have marked different

paths of growth in developed economies, being these differences more visible during

the recent economic crisis. This is the objective of this paper, to have multiregional

image of growth in developed countries, being elements such as capital accumulation,

interrelations between countries or, specially, R&D expenditure key in our study.

Models such as GTAP1, GLIO2, GRAM3 o WIOT4 offer a relatively detailed

economic data, showing interrelations between countries. Because of that, these kinds

of databases are useful to achieve our objectives. Here we will work with WIOT tables,

adding data from OCDE databases related to R&D expenditure.

WIOT tables, as Timmer (2012) indicates, is formed by 40 countries plus ‘Rest

of World’, which is residual. These countries are shown in table 1.

Table 1: Countries in WIOD database.

Fuente: Marcel P. Timmer (ed) (2012)

However, in order to adapt OCDE data in WIOT tables we will use in most of the years

25 countries, especially in the last section of our paper.

Besides, in order to make calculus and understanding of results easier, we

aggregate sectors and we will work with seventeen sectors; primary sector (PS), energy

sector (ES), food, beverages and tobacco sector, textile sector, paper and printing sector,

coke, refined petroleum and nuclear fuel sector, chemical sector, rubber and plastics

sector, other non-metallic mineral sector, basic metals and fabricated metal sector,

machinery and equipment sector, electrical and optical equipment sector, transport 1 Global Trade Analysis Project. 2 Global Link Input-Output Model. 3 Global Resource Accounting Model. 4 World Input-Output tables.

equipment sector, manufacturing and recycling sector, construction, high technology

services or HTS (where three sectors are included; post and telecommunications

activities, financial and insurance sector and professional, scientific, technical,

administrative and support service activities) and rest of services (RS).

In the first sections we will make a compare revision of WIOT tables from 1995

to 2011 and then we will focus on R&D expenditure and their effects in the economy. In

that way in the first part we will briefly comment how production and value added have

progressed from 1995 to 2011, both at absolute and per capita terms; in order to have a

first image of what has happened during this period. In this sense it is important to pay

attention in sectorial specialization that offer us relevant information about the structure

of the economy of each country. In the next section we will talk about trade between

countries, focusing again on its sectorial specialization. This could led us to complete

the previous image, since this globalize world makes interrelations between countries a

significant variable to explain growth, as some papers try to show, like Pier Saviotti &

Koen Frenken (2008). In the final section, an important part of our paper, we will talk

about the role of R&D expenditure in growth, being WIOD the scenery in which we

will work. In this section we want to offer a general view of the situation of R&D

expenditure in each country, but not only this. Motivate for Thijs ten Raa & Edward N.

Wolff (2000), we are also going to show and explain the final destinations of R&D

expenditure through spillovers effects between sectors and countries, inside a

multiregional mark, being this topic the most innovative question of our paper.

2. Output and value added: sectorial specialization.

Here we are going to try to show output and value added behavior from 1995 to

2011, both at absolute and per capita terms, focusing in the sectorial specialization of

each country.

In absolute terms, the highest production is found in USA, as it is expected a

priori. As it is known too, China production is significant and at the end of the period its

production has similar levels to USA’s output. Differences between both countries are

observed in rates of growth of output. In USA growth production keeps constant along

the time, being the rate of growth near to 5%. In the other hand, the evolution of China

is impressive. The average rate of China’s output is higher than 16%, being the highest

rate of all studied countries. In Brazil and India, rates of growth of output are, also,

significant, particularly since 2003, but they don’t get values as high as China, being

their average rates around 15%. Besides, crisis effect is more visible in those countries

than in China.

If we analyze production in per capita5 terms the ‘scenery’ changes.

Luxemburg’s production seems to be the higher, with values near to $35.000 million.

This is the result of the extraordinary growth that Luxemburg’s production has

experimented since 2002. Other countries with great levels of output are Ireland,

Austria, Sweden or Netherlands. We could find some explications to this fact. In the

case of Sweden or Netherlands, they don`t have high extension or population. However,

their health security or/and education are considered some of the best in the world,

together with Denmark, as social welfare indicators shown. In the other hand, in the

case of Luxemburg or Ireland, there are fiscal advantages that could be attracting big

fortunes (or enterprises) of other countries, making gross their output.

Respect to value added it is important to note the great levels of value added that

USA achieves, both at absolute and per capita terms; showing that it is not only relevant

the quantity of output, but also the value added involved in the process. These facts

would be emphasized when we observed the sectorial specialization.

To make easier the understanding of results here we are going to show the

weight of five big blocks of sectors; industry, services, primary sector, construction and

energy sector. Despite that we will show some disaggregate results too. We are going to

show this both for output and value added and for 1995 and 2011.

Table 2: Output by sectors.

5 Data of population is obtained from World Bank.

% of output

Industry Services Construction Primary sector Energy sector

1995 2011 Diference 1995 2011 Diferen

ce 1995 2011

Diference

1995 2011Diferen

ce 1995 2011 Diference

Australia 21,12 14,23 -6,89 59,08 59,51 0,43 9,76 12,14 2,38 3,63 2,70 -0,93 6,41 11,42 5,01

Austria 28,46 29,22 0,76 56,49 54,86 -1,63 8,52 7,56 -0,96 2,77 1,86 -0,91 3,76 1,86 -1,9

Belgium 33,04 28,90 -4,14 55,94 60,57 4,63 6,93 7,56 0,63 1,73 0,95 -0,78 2,36 0,79 -1,57

Bulgaria 36,68 31,92 -4,76 37,16 45,36 8,2 4,48 11,98 7,5 14,75 4,86 -9,89 6,93 0,24 -6,69

Brazil 32,46 28,50 -3,96 53,39 54,14 0,75 5,67 5,90 0,23 4,74 5,06 0,32 3,74 9,01 5,27

Canada 29,75 28,88 -0,87 54,85 55,15 0,3 6,52 7,21 0,69 3,51 2,79 -0,72 5,38 6,68 1,3

China 49,96 52,23 2,27 24,43 26,21 1,78 8,13 9,62 1,49 12,51 5,66 -6,85 4,97 49,13 44,16

Cyprus 20,91 13,24 -7,67 61,49 70,45 8,96 9,67 10,39 0,72 5,57 2,68 -2,89 2,36 0,04 -2,32

Czech Republic

35,74 41,36 5,62 42,27 44,55 2,28 9,67 7,29 -2,38 4,34 2,28 -2,06 7,98 0,85 -7,13

Germany 33,04 36,10 3,06 54,88 54,78 -0,1 7,78 4,89 -2,89 1,46 1,29 -0,17 2,84 7,01 4,17

Denmark 25,78 18,96 -6,82 60,78 68,06 7,28 6,83 5,82 -1,01 3,95 2,63 -1,32 2,66 0,95 -1,71

In general terms we can say that there is common pattern, being services the

most important block in developed economies. In this sense, we can see that in 1995

only in countries such as Bulgaria, China, Turkey or Taiwan, which are involved in a

developed process, the weight of industry in the total economy is higher than the

percentage of services. In 2011 the situation changes and only in China Industry is the

most important block. In fact, the evolution of services has been significant; being a

good example USA. In 1995 services represented 64% of total production whereas in

2011 this value increased 7 percentage points. By contrast, industry has a moderate

Spain 31,67 25,60 -6,07 50,59 56,40 5,81 10,44 11,79 1,35 4,23 2,25 -1,98 3,07 4,04 0,97

Estonia 31,38 23,49 -7,89 47,54 59,62 12,08 7,89 8,30 0,41 7,23 3,30 -3,93 5,96 0,08 -5,88

Finland 37,63 32,30 -5,33 49,67 54,54 4,87 6,08 7,99 1,91 3,88 2,35 -1,53 2,74 0,53 -2,21

France 25,57 25,21 -0,36 58,92 62,79 3,87 6,57 6,92 0,35 3,47 2,53 -0,94 5,46 4,55 -0,91

UK 28,67 16,89 -11,78 57,37 69,94 12,57 6,92 7,14 0,22 1,96 1,07 -0,89 5,08 7,72 2,64

Greece 22,55 17,32 -5,23 57,98 69,53 11,55 8,88 6,84 -2,04 7,78 3,36 -4,42 2,80 0,47 -2,33

Hungary 35,27 41,40 6,13 47,26 44,86 -2,4 4,91 3,65 -1,26 8,33 5,75 -2,58 4,23 0,47 -3,76

Indonesia 42,83 31,38 -11,45 31,94 34,56 2,62 10,29 14,54 4,25 9,82 9,79 -0,03 5,11 5,67 0,56

India 40,24 34,81 -5,43 31,72 39,21 7,49 6,54 11,52 4,98 16,41 10,50 -5,91 5,09 5,02 -0,07

Irland 38,96 36,64 -2,32 45,20 54,65 9,45 7,31 5,01 -2,3 6,21 1,47 -4,74 2,32 0,37 -1,95

Italy 35,80 29,86 -5,94 52,64 59,22 6,58 6,48 6,13 -0,35 2,53 1,65 -0,88 2,55 4,71 2,16

Japan 33,10 31,53 -1,57 52,63 57,24 4,61 9,64 6,54 -3,1 1,71 1,39 -0,32 2,92 13,12 10,2

Korea 45,80 53,98 8,18 38,35 35,88 -2,47 9,93 5,70 -4,23 3,97 1,89 -2,08 1,96 2,58 0,62

Lithuania 29,41 28,34 -1,07 42,77 54,95 12,18 7,31 6,56 -0,75 12,65 4,96 -7,69 7,87 0,13 -7,74

Luxemburg 19,92 7,60 -12,32 71,05 85,82 14,77 6,78 4,88 -1,9 0,96 0,31 -0,65 1,29 0,08 -1,21

Latvia 25,75 16,10 -9,65 53,38 62,19 8,81 5,56 11,85 6,29 10,52 4,37 -6,15 4,79 0,11 -4,68

Mexico 36,40 32,34 -4,06 46,73 47,32 0,59 5,71 7,84 2,13 4,70 3,41 -1,29 6,46 6,25 -0,21

Malta 38,29 19,11 -19,18 49,70 68,40 18,7 4,96 4,39 -0,57 2,73 2,26 -0,47 4,32 0,04 -4,28

Netherlands 28,33 26,78 -1,55 55,92 59,32 3,4 7,43 6,42 -1,01 3,62 2,21 -1,41 4,70 3,08 -1,62

Poland 32,27 33,31 1,04 44,41 48,19 3,78 7,55 9,10 1,55 8,82 3,68 -5,14 6,96 2,11 -4,85

Portugal 32,20 24,35 -7,85 50,65 59,45 8,8 8,94 8,70 -0,24 4,51 2,58 -1,93 3,70 0,76 -2,94

Romania 37,17 29,82 -7,35 31,56 45,26 13,7 6,91 11,01 4,1 15,84 7,06 -8,78 8,51 0,87 -7,64

Russia 27,57 27,58 0,01 45,99 48,52 2,53 5,96 6,29 0,33 8,31 4,41 -3,9 12,18 15,13 2,95

Slovakia 37,43 33,99 -3,44 42,04 44,84 2,8 7,01 9,73 2,72 6,02 3,15 -2,87 7,50 0,62 -6,88

Slovenia 36,96 29,54 -7,42 46,71 53,08 6,37 8,22 11,44 3,22 4,34 2,27 -2,07 3,76 0,13 -3,63

Sweden 32,45 29,44 -3,01 57,45 59,43 1,98 5,18 6,22 1,04 2,28 1,60 -0,68 2,64 1,20 -1,44

Turkey 40,55 33,93 -6,62 39,61 48,88 9,27 7,03 5,58 -1,45 10,33 6,96 -3,37 2,48 2,32 -0,16

Taiwan 45,66 48,10 2,44 41,72 43,85 2,13 7,01 4,27 -2,74 3,24 1,79 -1,45 2,37 0,74 -1,63

USA 26,07 19,84 -6,23 64,24 71,47 7,23 5,13 3,95 -1,18 1,76 1,57 -0,19 2,80 29,95 27,15

growth and in some cases even there is a decrease. This is the case of USA; in 1995

industry represented 26% of total output while in 2011 decrease until 19%.

In this sense we have to talk about the case of Luxembourg. As we can see in

table 2 the percentage of services of total production was 71% in 1995, while in 2011

was 85%. Moreover, the sector that major contribution makes to production is Financial

Intermediation, which represented 30% of total production in 1995. In 2011 this figure

is near to 50%. This may are reflecting the ‘special’ fiscal conditions that this country

has, and confirms what we have said before. This country has a great level of

production in per capita terms, but the explanation behind this fact is related to its fiscal

features, that could make this country be considered nearby fiscal paradise.

It is also important the case of construction. Construction seems to be one of the

sectors with more relevance in most economies, representing between 10% and 6% of

total output, depending of the country. In fact, construction, until the recent crisis, was

the second or the third sector with more weight in the different economies. This could

be an indicator of a bubble generated around this sector. A good example of that is

Spain, where construction represented 16% of total production in 2006. Since this year

this percentage decline in all countries due to crisis effect.

Now, we are going to see in table 3 which is the contribution of each block to

the generation of value added.

Table 3: Value added by sectors.

% of value added

Industry Services Construction Primary sector Energy sector

1995 2011 Diference 1995 2011 Diferen

ce 1995 2011

Diference

1995 2011Diferen

ce 1995 2011 Diference

Australia 14,58 8,51 -6,07 67,82 67,40 -0,42 5,99 7,25 1,26 3,82 3,03 -0,79 7,79 13,81 6,02

Austria 19,64 18,54 -1,10 66,61 69,81 3,20 7,90 6,74 -1,16 2,63 1,71 -0,91 3,22 3,19 -0,04

Belgium 20,28 14,54 -5,74 70,08 77,06 6,98 5,13 5,28 0,15 1,52 0,70 -0,81 2,99 2,42 -0,57

Bulgaria 21,96 17,57 -4,39 52,29 61,83 9,54 4,81 9,09 4,28 15,73 5,15 -10,58 5,20 6,36 1,16

Brazil 18,62 15,20 -3,41 66,70 67,81 1,11 5,49 5,89 0,41 5,77 5,58 -0,19 3,42 5,51 2,09

Canada 18,36 16,74 -1,61 66,82 67,09 0,27 4,95 5,76 0,81 2,77 1,93 -0,84 7,11 8,47 1,36

China 34,80 32,84 -1,96 32,86 43,13 10,26 6,13 6,79 0,65 19,96 10,11 -9,85 6,24 7,13 0,89

Cyprus 11,80 6,84 -4,96 72,46 80,35 7,89 8,30 8,20 -0,10 5,07 2,27 -2,79 2,38 2,34 -0,04

Czech Republic

24,26 25,84 1,58 56,69 59,68 2,98 6,58 6,20 -0,37 5,00 2,09 -2,91 7,47 6,19 -1,28

Germany 22,64 22,41 -0,23 66,58 69,49 2,91 6,76 4,19 -2,57 1,27 1,02 -0,25 2,75 2,89 0,14

Denmark 17,12 11,45 -5,67 71,45 76,30 4,85 4,67 4,83 0,15 3,47 1,55 -1,92 3,28 5,86 2,58

Spain 19,19 13,23 -5,97 64,86 72,12 7,26 7,50 9,10 1,59 5,45 2,73 -2,72 2,99 2,82 -0,17

Estonia 20,98 14,32 -6,66 61,24 70,96 9,73 6,67 6,95 0,29 5,82 2,58 -3,24 5,29 5,18 -0,12

In that way, in table 3 we can see that the block that major contribution makes to

value added is services, being higher than 50% in most countries (both in 1995 and

2011), as it is expected seeing previous comments. However, the contribution of this

sector to value added has grown less than the contribution of services to production.

This may be indicating that some sectors, belonged to services, involve low value

added, such as financial intermediation. In the case of Luxemburg, whose economy has

been focused on this sector along the period studied, the contribution of financial

intermediation to value added was 22% in 1995 and 26% in 2011, while the

contribution to production, as we have said, was 30% and 48% respectively. This is not

only indicating the low value added that some service sectors generate but also the

Finland 25,40 18,61 -6,78 62,19 68,97 6,78 4,85 6,68 1,83 4,49 2,70 -1,78 3,08 3,03 -0,05

France 14,24 10,12 -4,12 72,10 79,90 7,80 5,65 6,16 0,51 3,33 2,07 -1,25 4,68 1,75 -2,93

UK 20,94 11,69 -9,24 67,47 77,05 9,58 4,98 5,62 0,64 1,85 1,01 -0,83 4,76 4,63 -0,14

Greece 11,99 10,31 -1,69 69,64 79,07 9,43 6,01 4,45 -1,56 8,88 3,14 -5,73 3,48 3,02 -0,45

Hungary 21,27 25,32 4,04 62,63 62,07 -0,56 4,44 3,39 -1,05 8,02 5,65 -2,37 3,63 3,57 -0,06

Indonesia 29,48 22,65 -6,83 40,28 38,16 -2,12 6,79 10,17 3,38 15,42 14,73 -0,69 8,04 14,29 6,26

India 18,53 14,56 -3,97 45,77 56,72 10,95 5,06 8,05 2,98 25,71 16,53 -9,18 4,93 4,15 -0,78

Ireland 30,16 26,77 -3,39 54,97 65,58 10,61 5,35 4,12 -1,22 7,04 1,36 -5,68 2,49 2,16 -0,32

Italy 22,23 16,58 -5,65 66,42 73,17 6,76 5,31 5,87 0,56 3,31 1,89 -1,42 2,74 2,50 -0,24

Japan 22,59 18,60 -3,99 64,57 71,73 7,16 8,22 5,78 -2,44 1,74 1,34 -0,40 2,88 2,55 -0,33

Korea 27,21 31,09 3,88 54,04 58,14 4,10 10,11 5,87 -4,24 6,16 2,70 -3,46 2,47 2,20 -0,28

Lithuania 19,13 16,37 -2,76 57,54 69,69 12,15 7,01 6,41 -0,61 10,98 3,36 -7,62 5,34 4,18 -1,16

Luxemburg 13,69 6,46 -7,23 77,24 86,60 9,36 6,46 5,34 -1,13 1,03 0,30 -0,73 1,59 1,31 -0,28

Latvia 20,68 9,94 -10,74 60,57 76,06 15,48 4,58 6,62 2,04 9,07 3,29 -5,78 5,09 4,09 -1,00

Mexico 19,88 17,62 -2,26 61,36 61,13 -0,24 4,66 6,60 1,94 5,29 3,36 -1,93 8,80 11,29 2,49

Malta 21,67 13,29 -8,38 68,78 78,33 9,56 4,91 3,86 -1,06 2,86 2,05 -0,82 1,77 2,47 0,70

Netherlands 17,44 14,05 -3,39 69,16 73,52 4,36 5,43 5,30 -0,12 3,48 1,78 -1,70 4,49 5,34 0,85

Poland 21,11 18,07 -3,04 56,83 64,49 7,67 6,74 7,33 0,59 8,01 3,69 -4,32 7,31 6,41 -0,90

Portugal 18,44 13,40 -5,04 65,95 74,79 8,84 6,36 6,08 -0,28 5,80 2,46 -3,34 3,45 3,27 -0,18

Romania 25,57 23,61 -1,95 42,38 54,69 12,31 6,52 11,02 4,49 19,17 7,09 -12,08 6,37 3,59 -2,77

Russia 17,42 16,27 -1,15 56,44 59,62 3,18 6,00 5,81 -0,19 7,85 4,24 -3,61 12,29 14,06 1,77

Slovakia 26,78 19,56 -7,22 56,32 60,91 4,60 5,10 9,49 4,38 5,91 3,94 -1,98 5,88 6,10 0,22

Slovenia 25,69 19,59 -6,10 60,47 66,46 5,98 5,96 7,87 1,91 4,42 2,45 -1,97 3,45 3,64 0,19

Sweden 22,39 16,73 -5,66 66,49 71,02 4,53 4,59 5,89 1,30 3,02 1,87 -1,15 3,51 4,49 0,98

Turkey 29,29 18,44 -10,85 50,00 63,17 13,17 5,62 5,04 -0,58 11,81 9,16 -2,65 3,27 4,19 0,92

Taiwan 26,51 22,99 -3,52 62,20 71,37 9,17 4,90 2,36 -2,54 3,49 1,91 -1,58 2,91 1,37 -1,54

USA 15,50 12,25 -3,25 75,77 79,38 3,62 4,19 3,64 -0,55 1,24 1,19 -0,05 3,31 3,54 0,23

limitations to introduce new technology that could increase the generation of value

added.

In the other hand, value added in China has a peculiar behavior. In spite of being

industry the block that major contribution makes to value added, as could be expected at

first, it is services which makes the highest contribution to value added. In 2011

services contributed 43% to value added whereas industry contributed 33% (the highest

percentage that it is possible to observe). Besides, we can say that the sectors that more

production generate are different to the sectors that major contribution makes to value

added, may be reflecting the low quality of production, probably due to their levels of

development.

In addition to this we have commented we have to take into account

relationships between countries, and sectors involved in trade. About this we are going

to talk about in next section.

3. External specialization.

As it is known yet, in absolute terms, USA, China, Germany and Japan are the

countries that export and import more. However, as occurred with production, in per

capita terms this change and Luxemburg and Ireland are the countries where higher

exports and imports are observed. The reasons below that seem to be the same as we

have explained before, which could be noticed when we focus on sectorial

specialization.

Firstly, global exports are centered in electrical and optical equipment in most of

the years. So, we can say that the more exporter sector could be classified as industry of

high and medium-high technology. Nevertheless, we have to take into account that each

country is different and it depends on its economic structure.

For instance, in Australia and Canada the most important sector is Mining and

Quarrying because of the richness of its resources. In fact, together with Indonesia,

Mexico or Russia, their exports are centralized in energy sector (especially due to

resources of petroleum). The weight of exports in this sector, in respect with total

exports, is 60% in 2011 in Australia and 38% in Russia, being these percentages at the

same level in 1995. This seems to indicate that these countries, that are rich in row

resources, use their ‘comparative advantage’, which is coherent with David Ricardo’s

theories.

It is surprisingly again the case of China, being electrical and optical equipment

the most relevant sector in its exports, instead of textile sector. Even, the rate of growth

of exports in this sector is bigger than in textile sector, 22.12 and 12.96% respectively.

This could be indicative of a structural change where industry with major intensity in

technology is gaining relevance in Chinese economy.

In the other hand, Luxemburg, Ireland and Malta are the countries where exports

of services are more relevant. Particularly, in Luxemburg the weight in total exports of

services is 60%, being the contribution of financial sector the most important. The same

happens in the case of imports, as 85% of total imports in this country are generated by

services sector. This fact, together with previous results, seems to confirmed that growth

in Luxembourg (as in Ireland) is motivated for its ‘fiscal advantages’ that makes this

country being specialized in financial intermediation in spite of the low value added that

this sector involve, as we have said before.

In terms of importations it is significant its variability and the increasing

relevance of energy sector, that shows the increasing necessities of petroleum of

different countries, as we have seen in the case of exports too. A good example is the

case of Spain, where imports of energy sector grow significantly with a rate of growth

of 12.86% between 1995 and 2011.

We have also to talk about imports and exports destined to final demand, in

other words, to final households’ consumption and to final governments’ consumption.

Exports and imports destined to final households’ consumption seems to be focused on

food, beverages and tobacco sector, although in countries with less level of

development textile sector appears as relevant sector in their exports, as is the case of

China, Indonesia or Turkey. In Italy textile sector has a high weight too, being this

sector, traditionally, part of the structure of this country. We can say that may be there

are differences between the textile sector in countries such as China or Indonesia and

Italy. In the last, the quality of products is a great deal higher in Italy than in China, for

instance; which could be the result of the level of technology and maturity of the sector

in each one.

Through the final households’ consumption realized inside a country and the

exports destined to final consumption of households it is possible to approach to tourism

sector. This sector could be measure as the sum of two subsectors; hotels and

restaurants and transportation and storage6. In that way we can see that the most tourism

countries are Spain, Malta, Cyprus and Greece, representing 24%, 24%, 21% and 21%,

respectively, of total final households’ consumption. This seems coherent if we take

into account the geographical y climatological features of these countries. Moreover,

6 These sectors are included in rest of services due to the lack of R&D data.

these sectors have special relevance in the total exports services in Malta and Cyprus,

representing 42% and 38% of that. So we can say that most part of benefices of tourism

there, are due to services offered outside.

Related to final consumption of governments we can say that, both at absolute

and per capita terms, the countries where more weight has consumption of governments

are European countries, such as Denmark, Sweden or France. This could be explained

for the increasing participation of Estate in European countries, in the period study, with

the objective of keeping the welfare state. The sector that more relevance gets in total

exports and imports is chemical and chemical products sector. It is possible to find two

explanations to this. First, these kinds of products involve high technology and high

costs of investment. So most of enterprises, usually, take patents to maximize their

benefices, particularly in pharmaceutical sector. In that way, one form to obtain this

kind of products is trade. Together with this, Chemical sector is a strategic sector for

governments, explaining the importance of this sector in interrelations between

countries. In general, governments tend to focus on strategic sector. For instance, in

1995, Public Admin and Defense also gets relevance in exports and imports destined to

governments’ consumption. In that sense, we have to note how strategic sectors changes

along the time. If we observed evolution of consumption of governments, we can see

that in 2011 Public Admin and Defense have less importance in exports destined to

governments’ consumption than Renting of machinery and equipment. This could be

showing bigger exchange of ‘technology’ between countries due to the increasing

relations between them.

Until now, we have explained the economic structure of economies, both

internal and external. However, there is an important element that we have to analyze,

capital investment, which in WIOT tables is shown in demand part. On this we will

focus in next section.

4. Capital investment.

Capital investment is an important element to improve means of production and

to increase productivity, which seems to be a key factor to explain growth. However,

Antonia Diaz & Luis Franjo (2014) show a fact that has occurred in Spain in the period

studied. From 1995 to 2007 it is observed rates of growth for Spain between 2% and 3%

despite the low total factors productivity. Antonia Diaz & Luis Franjo (2014) explain

that this growth had been possible because of the high investment in structures, most of

which had been beneficed of subsidies. Nevertheless, it investment in equipment had

been hardly inexistent, by contrast with other countries, like USA, which has suffer less

the current crisis than Spain. The conclusion we can get is that not only matters the

amount invested but also where is invested. In this section we are going to analyze

internal and external investment and where it is located, through the study of gross fixed

capital formation.

China and USA are the countries where we found the highest investment, in

absolute terms. However, if we observe rates of growth of investment we see

differences between both. China achieves an average rate of 18%, while USA has an

average rate of 4%, which keeps stable until 2005. Since this year rate of growth of

investment started to decline and in 2008 this rate gets negative. Similar evolution can

be observed in Canada. So, the question now is could it has been a previous symptom of

a crisis? It is curious that in European countries investment didn’t start to decline until

2008, when the crisis ‘explodes’. In Germany, a reference country in European Union,

rate of growth of gross fixed capital was 22% in 2007 and -10% in 2009. Why?

Perhaps, the symptoms of a possible deceleration of the economy, noticed in USA and

Canada, has been hidden by the ‘protection system’ associated to European Union.

Analyzing the internal sectorial structure of gross fixed capital (see table 4) we

find an interesting fact. In all countries, investment in Construction is the most

important. We have to notice that in most countries investment in this sector represents

more than 60% and in some countries such as Spain, Ireland or Cyprus investment in

construction represents near 80% of total domestic investment, being a signal of the

boom generated around this sector. This seems to confirm what Antonia Diaz & Luis

Franjo (2014) show. Differences between countries are observed in investment destined

to equipment. In Germany, USA and the BRIICs investment in equipment represents,

between 15% and 20% of total domestic investment. By contrast, in other countries, as

is the case of Spain, this percentage only achieves figures near to 2%. Perhaps, these

differences may explain different behavior during the recent crisis. However, it is

observed a common evolution of investment in equipment. The weight that investment

in equipment represents of total investment declines since 2000-2001 approximately in

all economies except Brazil. Could this behavior of investment in equipment be another

symptom of a crisis?

Table 4: sectorial specialization of capital.

% Construction % Equipment

1995 2011 Diference 1995 2011 Diference

Australia 76,68 24,69 -51,99 4,08 1,77 -2,31

Austria 54,63 54,49 -0,14 7,51 2,90 -4,61

Belgium 59,92 59,46 -0,45 3,25 0,67 -2,58

Bulgaria 59,46 67,69 8,22 12,28 7,81 -4,47

Brazil 51,99 55,35 3,36 25,77 22,21 -3,56

Canada 75,76 71,78 -3,98 5,00 5,37 0,37

China 66,83 65,10 -1,72 20,83 23,67 2,84

Cyprus 84,45 76,59 -7,87 0,23 1,17 0,94

Czech Republic 57,88 59,75 1,87 8,78 14,50 5,72

Germany 58,03 52,35 -5,68 12,83 15,44 2,61

Denmark 59,99 56,83 -3,16 2,42 2,43 0,01

Spain 68,88 67,00 -1,88 3,99 2,78 -1,21

Estonia 56,19 67,80 11,61 8,28 0,76 -7,52

Finland 61,00 76,34 15,34 11,80 5,46 -6,35

France 56,46 55,47 -0,99 7,82 4,94 -2,88

UK 55,12 60,60 5,48 6,38 4,31 -2,07

Greece 75,73 64,30 -11,43 6,07 4,33 -1,74

Hungary 53,04 54,80 1,76 10,96 8,88 -2,08

Indonesia 79,80 90,37 10,57 14,58 3,66 -10,92

India 49,25 65,22 15,97 30,68 17,57 -13,11

Ire land

78,55 83,00 4,45 6,52 5,80 -0,72

Italy 53,12 52,71 -0,41 16,62 13,24 -3,38

Japan 60,01 55,55 -4,46 20,48 17,26 -3,23

Korea 63,43 65,40 1,97 22,13 17,64 -4,49

Lithuania 74,73 68,98 -5,75 3,28 1,89 -1,39

Luxemburg 76,24 77,58 1,34 1,23 0,01 -1,22

Latvia 73,67 67,44 -6,23 4,24 0,51 -3,73

Mexico 69,39 72,57 3,18 10,53 5,18 -5,35

Malta 41,56 51,16 9,60 8,77 0,21 -8,56

Netherlands 56,64 47,94 -8,70 2,94 1,18 -1,76

Poland 61,58 56,44 -5,13 14,76 6,37 -8,38

Portugal 63,87 63,37 -0,50 8,82 5,84 -2,98

Romania 59,00 72,02 13,02 32,25 12,80 -19,45

Russia 74,52 68,72 -5,79 10,63 14,90 4,27

Slovakia 61,58 69,97 8,39 9,06 6,07 -2,99

Slovenia 62,57 69,55 6,98 12,07 1,29 -10,77

Sweden 50,62 60,32 9,70 7,46 9,14 1,68

Turkey 65,01 54,20 -10,82 17,60 11,60 -6,00

Taiwan 63,92 57,13 -6,79 16,66 6,22 -10,43

USA 49,01 40,08 -8,94 22,66 18,00 -4,66

To complete this image we have to talk about the investment that each country

received/send from/to others. In absolute terms the countries where external investment

is higher are USA and Germany, both received and sending. If we observed what

happen with sectors we can say that countries usually invest in other countries in

industry sectors, being the most common sector electrical and optical equipment.

Besides, external investment seems to be destined to equipment. 60% of total external

investment corresponds to equipment and in some countries could represent 80% or

even more. In that sense we can said that, taken into account both external and internal

investment, investment in equipment increase thanks to the gross fixed capital came

from others countries. For instance, in USA total investment in capital represents 31%

of total investment, whereas internal investment was 20%. Despite that the evolution

followed by total investment in equipment is the same that the internal investment in

that sector. Besides, average rates of growth of external investment are near cero or

negative in some cases, being -5% in the case of China. By contrast, in Germany and

Japan we find positive but not high rates. All this facts led to make us again the same

question, is it possible to observe symptoms of a crisis before it would started?

Here we have seen the physical investment but as important as physical

investment is expenditure in R&D, being a key factor to improve the technology use in

production process.

5. R&D expenditure and spillover effects.

R&D data is obtained from OECD data base, particularly from Structural

Analysis databases and we use the file related to R&D expenditure in industry.

However, we do not have data for all countries, such as Malta or Luxembourg. Besides,

disaggregation by sectors is not the same for all countries (this is the case of China or

Denmark). These problems create some difficulties that we have to deal with when we

try to adapt R&D data to WIOT tables. The countries we will work with will be the

following; Germany, Australia, Austria (since 1998), Canada, China (since 2008),

Korea, Denmark (since 2009), Spain, Estonia (since 2005), Finland, France, Greece

(until 2007), Hungary, Ireland (until 2005), Italy, Japan, Mexico, Netherlands, Poland,

Belgium, Portugal, Czech Republic, Romania, Russia, Slovakia, Slovenia, Taiwan,

Turkey, UK and USA. First, we are going to explain what we can derive from R&D

expenditure data. Then, motivated for Thijs ten Raa & Edward N. Wolff (2000), we will

show and explain the final destinations of this R&D expenditure through spillovers

effects between sectors and countries.

5.1. R&D expenditure.

Observing the R&D expenditure data we can say that four countries stand out;

USA, Japan, Germany and China at the end of the period studied. Besides, there is a

positive tendency along the period, despite the beginning of the recent crisis and the

evolution followed by gross fixed capital. The effect of the crisis it is possible to see

better if we observe rates of growth of R&D expenditure. In 2008 and, specially, in

2009 this rate is negative for most countries. For instance, in Japan the rate of growth of

R&D expenditure was 3.5% in 2007 and in 2009 was -11%.

More interesting is the results related to weights of R&D expenditure respect to

output and value added. In countries such as Germany, Finland, Denmark, Japan or

USA the weight respect to output is near to 1% of total output and in the last years is,

even, higher. It is remarkable the case of Spain where it is observed low percentages

that achieves 0.40% in the last year, as is the case of Italy, Netherlands or China since

2008. These differences are important because they may distinguish between innovator

and followers countries, which could be important when we will introduce spillover

effects. Besides, we have to mention the evolution follow by these weights. In most

countries the percentage of R&D expenditure respect output has a significant growth

until 2001, approximately. Since this year this figure decline, particularly in Germany,

Finland, Japan and Denmark; where the R&D expenditure is the highest, as we can see

in graph 1. This evolution seems to be similar to the evolution followed by physical

investment, seen in last section. Perhaps, as we commented in section four, these results

could have been signals of the crisis that would have started in 2007.

The evolution followed by the percentage of R&D expenditure respect to value

added has (see graph 2) similar behavior as the percentage respect to output, although it

is possible to observe some differences. First, the countries where we find the highest

percentage are Finland, Japan, Denmark, Germany, USA and Korea. Besides, in the

case of value added, the R&D expenditure realized by these countries represents over

2% in the last four years. However, in countries such as Spain, Italy or Hungary this

percentage is around 0.8%, being some of the lowest values we can observe. The

evolution followed by the percentage of R&D expenditure respect to value added is

similar as the percentage respect to output in the six countries we focus on. In the cases

of Finland and Germany it is possible to observe a decline around 2000-2001,

approximately. The same negative tendency it is possible to observe in Denmark in the

years we have data for. By contrast, in the cases of USA, Japan and Korea it is possible

to observe a positive tendency with the beginning of the crisis, although in Japan we can

see more oscillations than in the other countries. As we have said before, perhaps these

evolutions could be indicating signals of crisis some years before the start of the current

crisis, as well as happened with physical investment.

Graph 1: percentage of R&D expenditure respect to output.

Graph 2: percentage of R&D expenditure respect to value added.

Japan Germany

Japan Denmark Germany

In section four we have also seen that is not only important the amount invested

but also where is invested. In general, R&D expenditure is located in sectors of high and

medium-high equipment such as Chemicals and Chemicals products, Machinery and

equipment or Electrical and optical equipment; although high technology services gain

positions along the years in some countries such as UK, Spain and USA. For instance,

as can be seen in table 5, in 1995 in Spain R&D expenditure realized in high technology

services represented 10% whereas in 2011 represented over 22%. In USA the change is

more visible, in 1995 R&D expenditure in high technology services represented over

20% and in 2011 this percentage had incremented 20 percentage points, being around

40% in that year. Despite that, countries, in general, have centered their R&D

investment in less sectors along the period studied and R&D expenditure, in the last

years, is usually located in sectors related to equipment sectors or to chemical products;

while at the beginning R&D expenditure was more distributed between sectors.

5.2. Spillover effects of R&D expenditure.

As we have seen, countries invest in R&D focusing in particular sectors.

However, relation between sectors and relations between countries create indirect

effects that are noticing in other sectors and countries. However, these indirect effect

could be different if the analysis is done in ‘quantities’ or in ‘values’. To show spillover

effects of the expenditure realized by the quantities side we use the following

expression7;

R (I-A)-1 y = S (1)

where R is the coefficients matrix of R&D expenditure respect to output and S is the

resulted matrix of spillover effects. We have to say that we build R and y through the

creation of diagonal matrices by parts. For example,

COUNTRY

1

COUNTRY

2

COUNTRY

1

Sector 1 2 4

Sector 2 3 6

COUNTRY

2

Sector 1 5 1

Sector 2 5 7

7 This equation has analogies with that used by Thijs ten Raa & Edward N. Wolff (2000).

In this case we will make a diagonal matrix for each colored area. In that way, we

would obtain a matrix such as the following:

COUNTRY 1 COUNTRY 2

Sector 1 Sector 2 Sector 1 Sector 2

COUNTRY 1 Sector 1 2 0 4 0

Sector 2 0 3 0 6

COUNTRY 2 Sector 1 5 0 1 0

Sector 2 0 5 0 7

It is important to say that the analysis is doing in a multiregional perspective, so

matrices of this equation are multiregional. In other words, they include domestic and

external data.

To make the analysis since values perspective we use the following expression:

w (I-B)-1 R= S

where (I-B)-1 is the Ghosh Inverse and w is the value added matrix, created as

the same way as demand matrix. We have to notice that in this case matrix R is the

coefficients matrix of R&D expenditure respect to value added. This expression is

obtained through the calculus of the relationship between Ghosh inverse and Leontief

inverse.

Until now we have explained the methodology used to get the spillover effects

of R&D expenditure. Now we are going to show the main results getting in both

analyses, trying to make a comparative description between the results obtained since

both sides. In graph 3 we show total, external and domestic flow of R&D expenditure

effects, both in quantities and values analysis.

Graph 3 (A): Total, external and domestic flow of R&D expenditure effects (quantities

analysis).

Graph 3 (B): Total, external and domestic flow of R&D expenditure effects (values

analysis).

In graph 3 (A) it is possible to observe a positive tendency, in general terms,

since 1995 to 2003, of the three flows since quantities side. In 2004 there is a decrease

in total and domestic flow, whereas external flow growing continuously until 2007. This

growth could be showing the process of globalization that happened with more

significance in these years. In the other hand, the decrease of total and domestic flow

could be the result of the less percentage of R&D expenditure respect to output we

observe in 2002, 2003, and 2004. Total and domestic flow, since quantities side, comes

back to positive path until 2007, when we find a decline. This decline is probably

reflecting the effect of the begging of current crisis. Between 2008 and 2009 the three

flows stay stable and in 2010 we can see another increase, probably being a small signal

of recuperation. However, this path didn’t continue in 2011 when total, domestic and

external flows decrease again, especially external flow with a rate of growth of 54%

approximately. This could be explained for the less externalization of countries in this

year as a consequence of the evolution of crisis started in 2007.

Since values side it is possible to observe some differences respect to quantities

side. First; as we can see in graph 3, (A) and (B), since quantities side domestic flow is

higher than external flow, but since values perspective the situation is the opposite. In

graph 3 (B), we can see that external flow, since values perspective, is really closer to

total flow and the evolution followed, along the period studied, is practically the same.

In both cases, we observe a positive tendency until 2010-2011, when total and external

flow drastically decline. In 2010 we observe a peak, as a consequence of some

improvements of economies, associated to expansion politics of economy, but in 2011 it

is reflecting the crisis effect. Respect to domestic flow the evolution is similar to total

and external flow, although the decline observed between 2010 and 2011 is not as

significant as in the case of external and domestic flow.

Now we are going to focus on countries. In that way, we are going to show what

countries are exporters and what countries are importers in net terms. Results obtained,

from one and another side, are different. For instance, the main exporters in the case of

quantities perspective are USA, Germany and Japan; whereas form values side the main

exporters are USA, Germany, Japan, France and Finland. This can be seen in graph 4,

(A) and (B), respectively. We have to notice that in graph 4 we show the net imports

respect external flow, so positive values indicates that imports are higher than exports

and negative values the opposite.

Graph 4 (A): percentage net imports respect external flow from quantities side.

Graph 4 (B): percentage net imports respect external flow from values side.

As we can see in graph 4 (A) (we remind that exporter countries have negative

values, while importer countries have positive values), the main exporter in most years

is USA followed by Japan and Germany, as we have said before. In fact, the average

percentage of net exports is 14.43%, 3.94% and 3.51% respectively. This is coherent if

we take into account that they are some of the countries with the higher R&D

expenditure.

Focusing on graph 4 (B), we can said again that the main exporters are USA,

Japan, Germany, France and Finland with an average rates of net exports of -7.13%, -

6.28%, -9.16, -3.91% and 2.36% respectively. In four of these countries we find the

highest percentage of R&D expenditure respect to value added (see graph 2), so is not

strange that these countries appear as great exporters of R&D. However, the case of

France is curious as it don’t have a great R&D expenditure, so probably this is

indicating that it is a country whose value added involved more R&D expenditure than

others. In graph 5 (A) and (B) we show the evolution of net imports of the great

exporters since both perspectives, in order to observe difference and similarities.

Graph 5 (A): Evolution of percentage net imports respect external flow of USA, Japan

and Germany, quantities side.

Graph 5 (B): Evolution of percentage net imports respect external flow of USA, Japan,

Germany, Finland and France, values side.

As we can see in graph 5 (A), since quantities side, the three countries have

different behavior along the period studied. USA in ten years increase the percentage of

net imports, being less negative, even in 2005 USA becomes an importer country with a

percentage of net imports of 10%. By contrast, Japan improves its position as main

exporter during these ten years, while Germany keeps its net imports stable since 1995

to 2005. In the crisis years the behavior changes in the three countries. In USA the

tendency is negative, being exports of spillover effects higher than imports, although we

find a peak in 2007 and in 2010, as well as happens in Germany and Japan. Despite

that, since 2005 to 2011 Japan and Germany have had similar tendency, although

Germany becomes an importer country in these years whereas Japan keeps it exporter

position with percentages around -5% approximately.

Since values perspective, it is observed an increase of net imports in the three

countries we have talked about yet. This is especially remarkable in the case of Japan,

where since quantities perspective at first it was a net importer and then only during

crisis years net imports slightly increase. Whereas since values perspective it is seen an

increase of net imports since 2004, approximately, that continues during crisis years.

This could be associated to the values chains that globalization has created. In the case

of USA and Germany differences are not as notable as in the case of Japan, as since

quantities side it is also observed an increase of net imports along the time, particularly

in Germany. The behavior of net imports in Finland and France is really similar,

keeping stable their net imports around -3%, until the beginning of the crisis, when it is

observed more oscillations probably associated to the crisis effect.

It is interesting to observe what sectors contribute to generate this spillover

effects. This is shown in table 6 (A) and (B).

Table 6 (A): contribution of sectors to imports of R&D expenditure, quantities side.

USA Germany Japan

1995

Transport, eq. 49.97 40.02 13.81

Chemicals 16.25 36.64 17.06

Electrical and optical, eq. 11.39 7.94 52.25

HTS 8.03 0.72 0.75

2003

Transport, eq. 43.92 40.44 16.28

Chemicals 19.83 39.60 16.75

Electrical and optical, eq. 6.16 3.19 47.45

HTS 13.61 2.63 3.58

2011

Transport, eq. 18.79 36.97 9.05

Chemicals 17.73 34.42 17.88

Electrical and optical, eq. 40.68 3.84 44.96

HTS 8.59 6.01 2.64

Table 6 (B): contribution of sectors to imports of R&D expenditure, values side.

USA Germany Japan Finland France

1995 Transport, eq. 39.51 40.76 14.47 3.04 55.39

Chemicals 20.79 35.47 24.01 17.60 9.83

Electrical and optical, eq. 6.94 5.52 32.92 27.66 2.99

HTS 11.25 1.12 2.94 16.69 6.45

2003 Transport, eq. 30.90 50.00 14.69 1.35 45.62

Chemicals 15.96 24.29 13.42 7.29 6.22

Electrical and optical, eq. 3.69 2.87 36.87 38.22 3.70

HTS 23.81 3.53 11.08 22.70 7.00

2011 Transport, eq. 25.23 47.85 21.62 1.88 40.76

Chemicals 19.23 21.03 14.15 4.17 4.44

Electrical and optical, eq. 21.34 2.82 29.11 49.61 3.99

HTS 25.03 7.02 9.28 23.37 10.65

First, we have to say that it is found small changes between the two perspectives,

quantities and values. Since quantities side, in 1995, Germany based its exports in

Chemicals and chemicals products and Transport equipment. This situation keeps along

all the period studied. Germany make most of it R&D expenditure in this sectors the six

years, so our result is coherent with this fact. In Japan the most important sector is

Electrical and optical equipment in the whole period; although in 2004 and 2005

chemicals and chemicals products and transport equipment get some importance to. The

behavior of this country is curious because the main R&D expenditure is realized in

Machinery at the beginning of the period and it is not until the middle when most part of

R&D expenditure is realized in Electrical and optical equipment. These facts, perhaps

are explained for the crisis of the 90s in Japan and the famous ‘loss decade’, which we

have mentioned before and could be affected enterprises and government behavior in

90s decade. Finally, exports of spillover effects in USA are, mainly, focused on

Transport equipment and Chemicals and chemicals products. In USA case we find more

variability along the years, for instance, in 1999 high technology services gain relevance

until 2005 and in 2011 instead of Transport equipment the most important sector is

Electrical and optical equipment. Since this year the contribution of high technology

services to generate spillover effects in others countries has keep stable. However, 28%

of R&D expenditure in USA in 2011 corresponds to high technology sectors. The

possible explanation is that the externalization of services, nowadays, is limited,

especially in comparison with industry. To sum up, we can say that in general terms the

sector that more spillover effects generated are sectors of high and medium-high

technology, which is something that countries should take into account when they

realized R&D expenditure.

In the case of values side, Transport equipment, Chemicals and chemicals

products and Electrical and optical equipment are, also, the most important sectors in

the five countries, at less at the beginning of the period. Since 1995, we can observe, in

some countries such as USA and Finland, an increasingly relevance of HTS, being this

the great difference respect quantities side. In fact, while in 1995 HTS represented 11%

and 16% respectively in 2011 this percentage get values over 20%.

Coming back to graph 4, it is observed that the main importers of effects of

R&D expenditure, since quantities side, are Canada, Mexico, Spain and Korea. We

don’t have data of China until 2008, so it is not possible to know what happens in

previous years. Since 2008, China is also an important importer of R&D expenditure.

From values side the main importers are Turkey, Mexico, Russia and Rumania, with

average rates of net imports around 3%. It is remarkable the China case, with an

incredible percentage of net imports since the quantities perspective while since values

perspective it is a net exporter. From our point of view, this could be associated to the

value chains, which are more important in the recent years, as we commented before for

the case of Japan and its R&D exports. In graph 6 we show the evolution followed by

net imports in these countries.

Graph 6 (A): Evolution of percentage net imports respect external flow of Canada,

Mexico, Spain, Korea and China, quantities side.

Graph 6 (B): Evolution of percentage net imports respect external flow of China,

Russia, Rumania, Turkey and Mexico, values side.

We observe some differences between the four countries, from quantities side, as

we can see in graph 6 (A). In Canada we observe a negative tendency since the

beginning of the period studied until 2005, approximately. Since that year, net imports

come back to the level of 1998, being around this value during the crisis. In the case of

Mexico the percentage of net imports keeps stable, around 5%, until 2004. In this year

we observe a decline and since then it is seen a positive tendency although with

oscillations. In Spain, the percentage of net imports respect external flow is around 3%

until 2007, perhaps due to the surplus of its payments balance. Between 2006 and 2007

we observe an increase, when imports of goods and services were the highest of euro

area. Then, in 2008 it is seen the crisis effect, getting percentages under 3% in the

following years. Net imports in Korea keeps stable too around 3% along all the period

studied. However, it is observed a peak in 2004, probably due to the external

relationships. Finally, we have to talk about China. As it has been said before, we only

have data since 2008. The percentage observe is the highest, getting values over 10%,

and since 2010 it is seen a spectacular increase, achieving a percentage of net imports

over 11% in 2010 and 17% in 2011. As Chinas economic features seems to be similar

after 2011, probably this tendency will have continue in the time.

From values side, we can observe that China is a net exporter and only in 2010

net imports were positive, achieving a value near 3. In general, in the four countries,

Turkey, Russia, Rumania and Mexico it is observed a negative tendency, only in 2010 it

is observed an slightly increase when there is a generalized increase of net imports in all

countries except UK, where the net exports get values around 50%, as we can see in

graph 4 (B).

Now we are going to focus in the sectors that more contribute to net imports, in

quantities and values side again, that it is shown in table 7 (A) and (B). Since quantities

perspective, in general, in Canada, Mexico, Spain and Korea the most significant sector

is Transport equipment. However, in 1997 electrical and optical equipment have a great

contribution too. In the other hand, in 2004 construction has some importance in Korea

and rest of services is gaining positions since this year in the other three countries. In

that way, res of services would be an important sector, mainly, in Spain. Finally, in

China the highest contribution to net imports corresponds to electrical equipment.

Besides, this contribution increases gradually each year. We can conclude that the more

importer sectors are sectors of high and medium-high technology, except in the case of

Spain where rest of services is gaining weight since 2004 to the end of the period. This

fact, perhaps, has made Spanish economy weaker than the others.

Table 7 (A): contribution of sectors to exports of R&D expenditure, quantities side.

Canada Spain Mexico Korea China

1995

Transport, eq. 68.86 48.97 43.16 24.26

Electrical and optical, eq. 4.69 3.49 17.74 18.28

Construction 4.30 6.06 4.68 11.83

RS 9.36 19.02 11.94 15.40

2003

Transport, eq. 57.93 41.55 42.95 33.17

Electrical and optical, eq. 3.52 2.74 15.98 23.01

Construction 5.61 7.41 5.71 9.60

RS 12.13 19.54 12.32 12.70

2011

Transport, eq. 44.34 34.53 32.00 28.87 6.01

Electrical and optical, eq. 9.56 3.19 30.09 27.15 44.36

Construction 7.11 6.07 5.18 8.12 13.10

RS 15.21 21.50 9.92 14.21 8.25

Table 7 (B): contribution of sectors to exports of R&D expenditure, values side.

Turkey Rusia Mexico Rumania

1995

Transport, eq. 11.26 11.24 11.3 11.31 Electrical and optical, eq. 4.82 4.81 4.84 4.83 HTS 20.18 20.3 20.32 20.43 RS 19.62 19.63 19.64 19.63

2003

Transport, eq. 6.8 6.78 6.97 6.82 Electrical and optical, eq. 7.47 7.49 7.53 7.41 HTS 23.23 22.58 23.04 23.23 RS 23.55 23.66 23.53 23.75

2011

Transport, eq. 5.63 5.88 5.69

Electrical and optical, eq. 8.48 8.58 8.49

HTS 23.92 23.85 24.13

RS 20.78 20.63 20.79

From values side we can say that sectors of high technology, such as electrical

equipment, Chemicals or Transport equipment, are also important but less than in

quantities perspectives. This is because since values perspective HTS and RS has also a

great importance, as we can see in table 7 (B). For example, in 2011 in Turkey HTS and

RS represented 23% and 20% respectively, and the same happens with the rest of

countries. So the big difference is that services sector has more importance since values

side than quantities perspective, representing the sum of both sectors over 40% of total

imports of R&D.

In that way we can conclude that the results obtained using Leontief and Ghosh

inverse are different. We have use both perspectives because, for us result interesting to

compare those results obtained in terms of output (Leontief inverse) with those obtained

in terms of value added o generated value, and to observe similarities and differences.

There are two main differences between both sectors that we have to remark. First, in

value side the indirect effect generates in other countries is so important, influencing the

evolution of total flow of spillover effects. This, perhaps, is due to the globalized

context that the economies work in and the tendency to outsource and externalize

supply chains. Finally, in value terms, services sectors have more relevance, both as

generator and receptor of spillover effects, reflecting the importance of this kind of

sectors to generate value added in the economies.

6. Conclusions

The objective of this paper has been to have an image of what has happened in

the world in order to have a better understanding of the factors that influence growth in

developed countries.

First we have seen that USA and China have been the major producers between

1995 and 2011. However, in per capita terms this changes and Luxemburg appears in

first positions, what could be explained for its fiscal features. This could be seen when

we analyze the structural specialization of each country, being financial intermediation

the main sector in Luxemburg’s economy. In spite of that, we find a common pattern in

most countries, where services are central in occidental economies and a standstill of

industry.

External specialization is also important and occidental countries tend to export

products related to high and medium-high technology sectors. However, it is also

observed that countries rich in resources centered their exports in mining and quarrying

or electrical sector, using their comparative advantage. Here is also remarkable

Luxemburg case, being the only country that focuses its trade on financial

intermediation.

An important variable to explain growth is investment in capital. However it is

not only important the amount invested but also where it is invested. We see that all

countries destined their investment to construction sector. However, we find some

differences, so that USA destined part of its investment to equipment, representing near

of 40% of total investment, while in other countries this percentage is the half. It is also

important the evolution followed by capital investment, particularly in USA and Canada

where it is observed a decline since 2005.

Finally, as important as investment in capital is R&D investment. USA and Germany

are the countries where R&D expenditure is the highest, together with Finland and

Denmark. We analyze the R&D expenditure in monetary and quantity terms. If we

analyze spillover effects in quantity terns, we can see that the key country is USA, being

its spillover effects the most important, particularly those derived from Transport

equipment, chemicals, electrical and optical equipment in the last years or high

technology services. However in monetary terms, five are the drivers of R&D

expenditure; USA, Germany, Japan, Finland and France. So the factors that generate the

indirect effects are different if we are thinking in quantities or in values. In quantities,

seem to be more important the relationships between countries and the amount

associated to trade, while from values side it is not only important the level of

externalization but also the amount invested. Another important fact is that the external

effect of R&D expenditure increase along the years and the similar evolution we find

with total flow since values perspective. This, probably, is indicating the importance

that externalization has in value terms.

Finally, thinking about the results obtained, it is possible to say that perhaps

there have been some signals of deceleration in occidentals’ economies before 2007,

when current crisis started. For example, the role of industry in the majority of the

economies is decreasing each year; capital investment is located in construction sector

instead of equipment sectors, where technology is more important; and both in capital

investment a R&D expenditure it is observed deceleration in important economies such

as USA or European economies. Besides, in terms of value added we find that the major

receptors of R&D are services sector, both rest of services and high technology services,

sector that have limitations to introduce technological innovations. It is a preliminary

study, so we have to make a more detailed analysis. In that way, our next objective is to

know how the factors studied in this paper determine different paths of growth and

make one economy stronger than other, facing with difficult situations, such as the

current crisis whose effects have not finished yet, probably using a SDA as

methodology.

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