How to assess the technological impacts of macro policy? The case of trade liberalisation in Argentina during the 1990s

ARZA, VALERIA

Toronto

Conferencia; 10th Annual CCC Doctoral Consortium; 2003

Rotman School of Management, University of Toronto

The impacts of trade liberalisation on technological development are particularly important because of their dynamic long-term effects on the economy.  My contention is that, even though trade does enlarge the external sources of information available for trading countries, it does not imply that firms within these countries will upgrade their technological skills. My point is that firm behaviour needs to be openly considered within each particular macro behaviour in order to disentangle the extent to which firms benefit from the broader opportunities that openness creates. The behavioural link between macro and micro spheres is of paramount importance. Firms’ decisions are sensitive to a number of determinants, which are path-dependent. Therefore, micro behaviour is not given in the ways that the conventional approaches in economics have claimed; instead it changes across countries, sectors, and types of firms. Two claims guide the discussion of the paper. The first emphasises the importance of micro behaviour and its diversity: firms will not react homogeneously in the same macro environment. Their decisions regarding technology stem from a model of behaviour based on conditions of opportunity, appropriability, cumulativeness and knowledge-base (OACK conditions) that are different for different firms. The second claim highlights the importance of macro behaviour. In particular, the macro behaviour that prevailed in Argentina at the time of liberalisation rewarded the short-term over the long-term. Given that technological decisions require a long-term horizon, this macro behaviour separated economic from technological performance as two distinct outcomes with different (sometimes opposite) characteristics. The paper pursues a comprehensive approach to technological change that relies on drawing a contrast between visible changes in performance and decision-making processes that stem from a behavioural dimension. Based on the Argentinean Innovation Survey 1997 the paper justifies the importance of a joint determination of these two dimensions for analysing macro-micro links of technological change as the most adequate way of assessing the impact of major macro-policy change on technology.