A Two-Country Model of Technology Sharing

This paper develops a two-country general equilibrium model of technology sharing to study world trade patterns. A technologically advanced country enjoys the benefit of comparative advantage due to her access to superior technology. The static model presented in this paper comes out with structural equations that show if a country with advanced technology shares her exclusive technology know-how with a technologically less-advanced country, up to a certain level, both of them will get higher gains from trade. A novel contribution of this paper is to determine the endogenous technology sharing that provides the highest level of utility to the technology leader