Welfare Effects of Technological Convergence in Processed Food Industries

Posted: 11 Apr 2008

See all articles by Jun Ruan

Jun Ruan

Oregon State University - Department of Applied Economics

Munisamy Gopinath

Oregon State University - Department of Applied Economics

Steven Buccola

Oregon State University - Department of Applied Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2007-07

Abstract

We develop a monopolistic competition model to investigate effects of international technological convergence on factor rewards, output composition, and welfare. Comparative static analysis indicates technological convergence improves the follower'sbut impairs the leader'sinternational competitiveness. The leader's welfare improves unambiguously; the follower's welfare depends on the relative strength of convergence's income and terms-of-trade effects. We use data from seventeen food industries in thirty countries, 19932001, to test these analytical predictions. Evidence of convergence is found in thirteen of seventeen industries. Convergence lifts followers' relative wages and global value-added shares. Followers benefit from convergence's positive income effect. Leaders benefit from higher terms of trade.

Suggested Citation

Ruan, Jun and Gopinath, Munisamy and Buccola, Steven, Welfare Effects of Technological Convergence in Processed Food Industries (2007-07). American Journal of Agricultural Economics, Vol. 90, No. 2, pp. 447-462, May 2008, Available at SSRN: https://ssrn.com/abstract=1119000 or http://dx.doi.org/10.1111/j.1467-8276.2007.01063.x

Jun Ruan (Contact Author)

Oregon State University - Department of Applied Economics ( email )

213 Ballard Extension Hall
Corvallis, OR 97331-4501
United States

Munisamy Gopinath

Oregon State University - Department of Applied Economics ( email )

213 Ballard Extension Hall
Corvallis, OR 97331-4501
United States
541-737-1402 (Phone)
541-737-2563 (Fax)

Steven Buccola

Oregon State University - Department of Applied Economics ( email )

213 Ballard Extension Hall
Corvallis, OR 97331-4501
United States

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