Journal Article Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model Get access Ronald Findlay Ronald Findlay Columbia University and Institute for International Studies, Stockholm Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 92, Issue 1, February 1978, Pages 1–16, https://doi.org/10.2307/1885996 Published: 01 February 1978

This paper constructs a model of trade in which an intermediate good is produced by an "Austrian" point-input-point-output process of variable duration while the finished good is produced instantaneously by labor alone. The rate of time preference is a function of the level of stationary consumption and the two countries differ in the rate at which they discount the future. It is shown that the less "impatient" country will export the time-intensive intermediate good and import the finished good, with both countries incompletely specialized and the rate of interest and real wage equalized.

This paper constructs a model of trade in which an intermediate good is produced by an "Austrian" point-input-point-output process of variable duration while the finished good is produced instantaneously by labor alone. The rate of time preference is a function of the level of stationary consumption and the two countries differ in the rate at which they discount the future. It is shown that the less "impatient" country will export the time-intensive intermediate good and import the finished good, with both countries incompletely specialized and the rate of interest and real wage equalized.