LEARNING BY DOING, THE TECHNOLOGY GAP, AND GROWTH

In contrast with other trade and growth theories in previous literatur e, I present a growth theory of trade-induced learning: Other things b eing equal, two conditions are essential for trade-induced learning. F irst, both exports and imports are equally important sources and are m utually reinforced in intensifying the learning process. Moreover, the nature or characteristics of these traded goods also influence the ef fect of learning. Second, trade openness is a prerequisite but not a s ufficient condition for rapid growth. With whom one trades (one's trad ing partner) is a key factor in determining trade-induced technology s pillover and hence in affecting enduring growth. Therefore, this trade -induced learning theory provides abundant and testable implications f or the empirical study of trade and growth.