researchers is used as a proxy for R&D, and its elasticity of economic growth is estimated from the panel of OECD countries.<sup>29</sup> A random number generator is then used to construct a research vector consistent with the empirical distribution, assuming that SSA countries have the lowest number of resident researchers and scientists—less than 100 per million [Westholm (2004), UNESCO (2005)]. Other variables in the model are consistent and accordingly defined. Capital accumulation is proxied by investments. The quality of governance is captured by the corruption index, which is derived from International Country Risk Guide. Net private capital flows and current account series are from the IMF World Economic Outlook. The number of researchers is from the OECD database. The rest of the data is from the World Bank World Economic Indicators.

In what follows, we use a relaxed form of the model to investigate the determinants of globalization. The reference period covers a nearly 20 year time frame, starting in the mid-1980s and running through the end of 2006. This reference period accounts for most of the current wave of globalization. A two-step approach is used to account for differences between the sample of globalizers and globalizees. While the former—set of globalizers’ nations—primarily includes OECD countries (industrialized and emerging market economies), the latter—set of globalizees’ nations—has a much narrow geographical coverage, restricted to low-income countries in Sub-Saharan Africa. The sample of globalizers comprises 30 OECD countries. In Sub-Saharan Africa, the analysis is based on a sample of 29 countries.<sup>30</sup> This sequential approach is also motivated by the difference between these two sets of countries, be it from the standpoint of their production function and contribution to global growth, or from the standpoint of their recent export performance. Recall that the new globalization landscape is driven by exports of high-tech and manufactured goods, which account for an increasingly larger share of global trade [World Bank (2005)].<sup>31</sup> And to the extent that increases exports in response to rising global demands under this new landscape is more likely in advanced and more diversified economies, an identification of relevant determinants of globalization in these countries could have significant policy implications for growth and integration into the new globalization landscape for Sub-Saharan African countries.

In order to mitigate variance effects on the stability of estimated parameters and for all practical purposes, variables are expressed in logarithmic terms. Hence, in the first empirical model, the log of the response variable—actual level of exports of goods and services—is expressed in terms of prospective determinants of globalization in the linearized model. These determinants are divided into three sub-groups: technology level variables, efficiency factors and traditional

> 29 In a virtuous cycle the stock of resident researchers can serve as both R&D input and output. Positive flows and increase in the stock of researchers add to human capital development; innovations and inventions critically depend on the stock of researchers and R&D budget.

> 30 The sub-sample of Sub-Saharan African countries includes: Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Cote d’Ivoire, Ethiopia, Gabon, Gambia, Ghana, Kenya, Madagascar, Malawi, Mali, Mauritius, Mozambique, Namibia, Niger, Rwanda, Senegal, Sierra Leone, South Africa, Swaziland, Tanzania, Togo, Uganda and Zambia.

31 Interestingly, the rising scope of manufacturing exports is consistent in advanced and developing countries alike; although the significant increase in this component of global trade is compensated by falling natural agricultural and resources exports in the latter. According to the latest statistics, manufacturing exports rose to account for over 90 percent of low-income countries share of world exports; at the same time their share of primary commodities exports fell dramatically, and now account for less than 10 percent [World Bank (2005)].

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