The relationship between technological change and economic growth in Iraq: An analysis of technology transfer in Iraq for the period 1960-1978: A Production Function Approach is used and relationships between technology transfer and economic growth identified.

Abstract

In this study an attempt has been made to explore the role of technology transfer in the economic growth of Iraq, through the change in the technology itself for the period 1960-1978. For this purpose the economy was disaggregated into seven sectors. The experience of developed countries has shown that technical change is one of the most important factors of economic growth alongside, or even overshadowing, such factors as labour and capital. In the light of technology transfer, developing countries have the advantage of introducing high levels of advancement of knowledge which can be used to induce domestic technical change at later stages. Technical change is normally defined as a shift in the production function, and for this reason two forms of production function were estimated and tested, i. e. the constant elasticity of substitution and the Cobb-Douglas function. Also two specifications (constant and variable) were assigned to technical change. To validate the use of these, statistical tests were conducted to establish the optimum fit. Then the selected form was used to simulate output levels for comparison with actual figures. The techniques used for estimation are both linear and non-linear. Data used are time series in real terms of capital stock and output, as well as number of persons employed. Furthermore in order to judge the importance of technical change to the growth of output on aggregate and sectoral levels, as regards economic growth, comparisons were drawn with existing data from other developed and developing countries, including centrally planned economies.