technology diffusion (from large to small countries) not just because smaller countries are, on average, more open to imports than large ones, but also because of differences in the spectrum of specialization.

_Sectoral aspects_ This last point leads us to the issue of the relationship between aggregate outcomes and sectoral determinants. Some authors (Dollar and Wolff 1993) have suggested that increases in TFP are the results of sectoral performance: i.e. aggregate results "hide" sector specific behavior in the sense that convergence in TFP is associated with increasing sectoral specialization. If, in addition, productivity changes are the result of technology accumulation, knowledge is, to a large extent, sector specific. This could be reflected in its geographical diffusion patterns, i.e. while one does not need to observe a general tendency towards technological regionalism this may be present at sectoral levels.

Evidence on international technology specialization (Archibugi and Pianta 1992, 1994) shows that there are important differences between small and large countries. The former specialize only in a limited number of sectors, while no large country (not even the US) enjoys leadership in all technology intensive sectors. A regional pattern of technology diffusion assumes a hierarchical structure in the sense that, on the one hand, diffusion may take a regional dimension, on the other hand smaller countries in the region specialize only in a limited number of sectors in which the region as a whole is specialized.

Looking at technological specialization -measured by sectoral distribution of patents- Archibugi and Pianta introduce a measure of technological distance between pairs of countries, i.e. a measure of similarity between patterns of technological specialization. In this case too, not surprisingly, country size is quite relevant. Larger countries are more similar with one another because they spread technological innovation (as measured by patents) across more sectors, i.e. they are less specialized. Smaller countries are more specialized and they also tend to be technologically closer to the larger country which shares the same sectoral specialization. This pattern can be found also in trade and production specialization (Dollar and Wolff 1993).

The introduction of sectoral aspects leads to a more varied pattern of technological relations. Archibugi and Pianta show that within Europe, France and the UK are more similar to the US (which is also very similar to Canada), Germany is more similar to Italy and is closer to France and the UK than it is to the US, while its distance from Japan is the highest among the large countries. Italy is close only to Germany and quite distant from the other large EU countries. Spain is close to Germany and Italy and far from the US. Smaller countries such as Belgium and the Netherlands are closer to the UK and France than to Germany. In general, these results suggest that Europe is not an homogeneous technological region. This is consistent also with the results of Caballero and Lyons (1992) who find only weak evidence of sectoral and national externalities among the large European countries. Finally, Japan shows clearly distinct features and is distant from almost every other country.

Results by OECD (1996) also suggest that regional patterns, in the sense of technology flows through trade associated with geographical proximity, are sector specific rather than country specific, i.e. smaller countries acquire embodied technology from large countries that vary according to the sector involved. Italy acquires technology from the US in the computers sector and from Germany in 6