Explaining Japan'S Innovation And Trade: A Model Of Quality Competition And Dynamic Comparative Advantage
AbstractIn this paper, I develop a model of dynamic comparative advantage based on endogenous innovation. Firms in each of two countries devote resources to R&D in order to improve the quality of high-technology products. Research successes generate profit opportunities in the world market. The model predicts that a country such as Japan, with abundance of skilled labor and scarcity of natural resources, will specialize relatively in industrial innovation and in the production of high-technology goods. Data are provided to support this prediction. I use the model to explore the effects of R&D subsidies, production subsidies and trade policies on the long-run rates of innovation in trade partner countries and on the long-run pattern of trade.
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Bibliographic InfoPaper provided by Princeton, Woodrow Wilson School - Public and International Affairs in its series Papers with number 151.
Length: 36 pages
Date of creation: 1989
Date of revision:
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innovations ; competition ; economic models ; trade ; research and development ; technology;
Other versions of this item:
- Gene M. Grossman, 1989. "Explaining Japan's Innovation and Trade: A model of Quality Competition and Dynamic Comparive Advantage," NBER Working Papers 3194, National Bureau of Economic Research, Inc.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Balassa, Bela & Noland, Marcus, 1989. "The changing comparative advantage of Japan and the United States," Journal of the Japanese and International Economies, Elsevier, vol. 3(2), pages 174-188, June.
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Economics Working Papers
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- Braunerhjelm, Pontus & Thulin, Per, 2006.
"Can Countries Create Comparative Advantages? R&D-expenditures, high-tech exports and country size in 19 OECD-countries, 1981-1999,"
Working Paper Series in Economics and Institutions of Innovation
61, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Pontus Braunerhjelm & Per Thulin, 2008. "Can countries create comparative advantages? R&D expenditures, high-tech exports and country size in 19 OECD countries, 1981-1999," International Economic Journal, Taylor & Francis Journals, vol. 22(1), pages 95-111.
- Badibanga, Thaddee Mutumba & Diao, Xinshen & Roe, Terry L. & Somwaru, Agapi, 2008. "Dynamics of Structural Transformation: Understanding the Key Factors That Drive Innovative Activities in Selected Asian and African Countries," Bulletins 43890, University of Minnesota, Economic Development Center.
- Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
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