I. BACKGROUND

Without going over the history of the literature in regional dynamics (Haynes et al, 1997),
we know that there has been a recent growth in studies of international and interregional
convergence using aggregate economic indices. This literature often examines the relationship
between new technology and economic growth (Solow, 1956; Porter, 1990; Enos, 1992; Hobday,
1995; Anderson, 1996; Rigby, 2000; Amsden and Chu, 2002). Much of that analysis indicates
that chronological ‘lateness’ in the industrialization process does not relegate lagging regions
permanently to their disadvantaged position. Positive changes due to increases in efficiency,
rapid technological change, technological diffusion and spillovers, access to new markets and
differential costs of factor inputs may all play a role in the reduction or elimination of gaps in
competitive capacity, creating the possibilities for economic catch-up. Sharif (1989) recognized
these ‘late-industrializers’ as latecomers in the context of technological innovation and diffusion.
He noted that beneficial learning investments on the part of newcomers and the encumbrances of
earlier investments on the part of mature industrializers might play compensating roles leading to
different forms of convergence. Others have noted late adoption generates advantage in the
incorporation of new technology and may result in accelerated diffusion among lagging regions
creating newer opportunities for latecomers (Gerschenkron, 1962; Abromevitz, 1986; Perkins
and Neumayer, 2005).

Other explanatory factors of empirically successful latecomer strategies include the
degree of openness to international trade and investment and the level of integration into the
globalization process (Storper, 1997; OECD, 1998; Rigby, 2000; Lall, 2002). Perkins and

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