International Trade with Competitiveness Effects in R&D
AbstractIn an oligopoly trade model where firms engage in R&D, international differences in market size allow for the emergence of endogenous asymmetries between firms. Concretely, firms located in countries with more demand become more competitive because they have strong incentives to perform R&D ('home market' and 'competitiveness effects' in R&D). As a consequence, these firms have better access to export markets and the countries where they are hosted often also tend to run trade surplus in the oligopolist sector. This shows that cross-border differences at the level of R&D intensity can be a basis for international specialization.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5547.
Date of creation: Mar 2006
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Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-08 (All new papers)
- NEP-COM-2006-04-08 (Industrial Competition)
- NEP-INO-2006-04-08 (Innovation)
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