LEAPFROGGING IN INTERNATIONAL COMPETITION - A THEORY OF CYCLES IN NATIONAL TECHNOLOGICAL LEADERSHIP

Endogenous-growth theory suggests that technological change tends to r einforce the position of the leading nations. Yet sometimes this leade rship role shifts. We suggest a mechanism that explains this pattern o f ''leapfrogging'' as a response to occasional major changes in techno logy. When such a change occurs, the new technology does not initially seem to be an improvement for leading nations, given their extensive experience with older technologies. Lagging nations have less experien ce, the new technique allows them to use their lower wages to enter th e market. If the new technique proves more productive than the old, le apfrogging of leadership occurs.