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on Information and Communication Technologies |
| By: | Lasha (International School of Economics at TSU); Irene |
| Abstract: | Do countries gain more by liberalizing trade together than alone? We study the WTO’s 2016 Phase II expansion of the Information Technology Agreement (ITA), which eliminated tariffs on products covering roughly 12% of world goods trade. Using triple-difference structural gravity, importer–product market access rose by 4–6%. Decomposition reveals nearly half reflects generalequilibrium coordination spillovers—exceeding contributions from direct tariff cuts or reduced policy uncertainty. Exploiting variation in coalition size, spillovers turn positive once participants span about two-thirds of world imports—well below the 80% critical-mass benchmark commonly assumed for plurilaterals. Conditional general equilibrium counterfactuals show ITA Phase II reduced members’ import price indexes by 1.4 percentage points on average, peaking near 2.0 percentage points by 2019. Joint liberalization yields benefits beyond the sum of individual actions— evidence of the force of many. |
| Keywords: | Plurilateral agreements, trade liberalization, Information Technology Agreement (ITA), trade policy uncertainty, structural gravity model, triple-difference estimation, general equilibrium counterfactuals, import price index |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:tbs:wpaper:2026-02 |
| By: | Dany Bahar (Center for International Development at Harvard University); Shreyas Gadgin Matha; Ricardo Hausmann (Harvard's Growth Lab); Santiago Segovia (Harvard's Growth Lab) |
| Abstract: | Japan remains one of the world’s most technologically sophisticated economies, yet its labor productivity has been stagnant for more than two decades. This paper investigates the apparent contradiction between Japan’s high R&D intensity and its weak productivity performance by examining the allocation, composition, and effectiveness of innovation across industries. Using industry-level data from the OECD, patent-level data linked across technology and industry classifications, and a set of nine technological taxonomies, we document that Japan disproportionately concentrates R&D in mid-technology manufacturing sectors—such as motor vehicles, electrical equipment, and chemicals—that generate relatively low productivity spillovers. High-technology sectors, including ICT, pharmaceuticals, scientific R&D, and advanced digital services, receive a significantly smaller share of investment and exhibit much higher productivity contributions in other countries. We further show that Japan’s indirect, tax-based system of R&D support reinforces this equilibrium by favoring large incumbents and under-supporting SMEs. We conclude by assessing the potential of Japan’s new 17-sector strategy to reorient the innovation system toward frontier technologies. |
| Keywords: | Japan, innovation, industrial policy |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:269 |