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Technology Diffusion through Trade with Heterogeneous Firms

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  • Bulent Unel

Abstract

I investigate the long-run implications of trade and technology diffusion through trade, when firms are heterogeneous and trade is costly. This paper integrates firm heterogeneity and trade into a product innovation growth model from endogenous growth theory. I find that although exposure to trade increases average productivity, it has an ambiguous effect on economic growth and consumer welfare. Copyright � 2010 Blackwell Publishing Ltd.

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File URL: http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-9396.2010.00880.x
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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 18 (2010)
Issue (Month): 3 (08)
Pages: 465-481

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Handle: RePEc:bla:reviec:v:18:y:2010:i:3:p:465-481

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576

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References

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  1. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  2. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March.
  3. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
  4. Baldwin, Richard & Robert-Nicoud, Frédéric, 2005. "Trade and Growth with Heterogeneous Firms," CEPR Discussion Papers 4965, C.E.P.R. Discussion Papers.
  5. Nina Pavcnik, 2000. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," NBER Working Papers 7852, National Bureau of Economic Research, Inc.
  6. Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
  7. Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
  8. Grossman, Gene M & Helpman, Elhanan, 1989. "Product Development and International Trade," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1261-83, December.
  9. repec:rus:hseeco:121669 is not listed on IDEAS
  10. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  11. Aw, Bee Yan & Chung, Sukkyun & Roberts, Mark J, 2000. "Productivity and Turnover in the Export Market: Micro-level Evidence from the Republic of Korea and Taiwan (China)," World Bank Economic Review, World Bank Group, vol. 14(1), pages 65-90, January.
  12. Michelle P. Connolly & Diego Valderrama, 2005. "North-South technological diffusion and dynamic gains from trade," Working Paper Series 2004-24, Federal Reserve Bank of San Francisco.
  13. repec:rus:hseeco:122439 is not listed on IDEAS
  14. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  15. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
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Citations

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Cited by:
  1. Baldwin, Richard & Robert-Nicoud, Frédéric, 2006. "Trade and Growth with Heterogenous Firms," CEPR Discussion Papers 5563, C.E.P.R. Discussion Papers.
  2. Bulent Unel & Elias Dinopoulos, . "Quality Heterogeneity and Global Economic Growth," Departmental Working Papers 2009-06, Department of Economics, Louisiana State University.
  3. Frédéric Olland, 2012. "Asymmetries with R&D-Driven Growth and Heterogeneous Firms," Working Papers of BETA 2012-16, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  4. katsufumi, fukuda, 2012. "Gains and Losses from International Trade in a Knowledge-driven Semi-endogenous Growth Model with Heterogeneous Firms," MPRA Paper 40818, University Library of Munich, Germany, revised 22 Aug 2012.
  5. Dinopoulos, Elias & Unel, Bulent, 2013. "A simple model of quality heterogeneity and international trade," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 68-83.
  6. Julian P. Christ & Patricia Hofmann, 2010. "International Openness and Patent Activity: First Descriptive Results Very preliminary draft," DEGIT Conference Papers c015_055, DEGIT, Dynamics, Economic Growth, and International Trade.
  7. Katsufumi Fukuda, 2013. "The Effect of Globalization in a Semi Endogenous Growth Model with Firm Heterogeneity, Endogenous International Spillover, and Trade," Discussion Paper Series DP2013-21, Research Institute for Economics & Business Administration, Kobe University.
  8. Patricia Hofmann, 2008. "Globalization and Technical Progress: Channels of Reciprocal Interaction A Literature Review," DEGIT Conference Papers c013_011, DEGIT, Dynamics, Economic Growth, and International Trade.
  9. Naito, Takumi, 2012. "A Ricardian model of trade and growth with endogenous trade status," Journal of International Economics, Elsevier, vol. 87(1), pages 80-88.

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