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Trade Liberalisation, Process and Product Innovation, and Relative Skill Demand

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Author Info
Sebastian Braun

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Abstract

The interaction between trade liberalisation, product and process innovation, and relative skill demand is analysed in a model of international oligopoly. Lower trading barriers increase the degree of foreign competition. The competing enterprises respond by investing more aggressively in lowering marginal costs of production. Moreover, firms reduce the substitutability of their products through additional investment in product innovation. The paper also shows that the relative demand for skilled workers may increase as a result.

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File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2007-001.pdf
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Publisher Info
Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2007-001.

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Length: 19 pages
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:hum:wpaper:sfb649dp2007-001

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Related research
Keywords: Intra-industry Trade; Process Innovation; Product Innovation; Relative Skill Demand; Trade Liberalisation;

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D

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References listed on IDEAS
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.:
  1. Haaland, Jan I. & Kind, Hans Jarle, 2004. "R&D Policies, Trade and Process Innovation," CEPR Discussion Papers 4784, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Lin, Ping & Saggi, Kamal, 2002. "Product differentiation, process R&D, and the nature of market competition," European Economic Review, Elsevier, vol. 46(1), pages 201-211, January. [Downloadable!] (restricted)
  3. Neary, J Peter, 2002. "Foreign Competition and Wage Inequality," Review of International Economics, Blackwell Publishing, vol. 10(4), pages 680-93, November. [Downloadable!] (restricted)
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  4. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U.S. Wage Inequality: Re-Assessing the Revisionists," NBER Working Papers 11627, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. J.Peter Neary, 2003. "Globalisation and Market Structure," DNB Staff Reports (discontinued) 100, Netherlands Central Bank. [Downloadable!]
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  6. Rosenkranz, Stephanie, 2003. "Simultaneous choice of process and product innovation when consumers have a preference for product variety," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 183-201, February. [Downloadable!] (restricted)
  7. Pia Weiss, 2003. "Adoption of Product and Process Innovations in Differentiated Markets: The Impact of Competition," Review of Industrial Organization, Springer, vol. 23(3_4), pages 301-314, December. [Downloadable!]
    Other versions:
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