This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Innovation and Trade with Heterogeneous Firms

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Ngo Van Long
Horst Raff
Frank Stähler

Additional information is available for the following registered author(s):

Abstract

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. We identify two effects of trade liberalization on productivity: a direct effect through changes in R&D investment, and a selection effect due to inefficient firms leaving the market. We show how these effects operate in the short run when market structure is fixed, and in the long run when market structure is endogenous. Among the robust results that hold for any market structure are that trade liberalization (i) increases (decreases) aggregate R&D for low (high) trade costs; (ii) increases expected industry productivity; and (iii) raises expected social welfare if trade costs are low

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.ifw-members.ifw-kiel.de/publications/innovation-and-trade-with-heterogeneous-firms/KWP1430.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1430.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 28 pages
Date of creation: Jun 2008
Date of revision:
Handle: RePEc:kie:kieliw:1430

Contact details of provider:
Phone: +49 431 8814-1
Fax: +49 431 85853
Email:
Web page: http://www.ifw-kiel.de

For technical questions regarding this item, or to correct its listing, contact: (Dieter Stribny).

Related research
Keywords: international trade; firm heterogeneity; R&D; productivity; market structure;

Other versions of this item:

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

This paper has been announced in the following NEP Reports:

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. Marianna Belloc & Samuel Bowles, 2009. "International Trade, Factor Mobility and the Persistence of Cultural-Institutional Diversity," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  2. Roberto Alvarez & Ricardo López, 2005. "Exporting and performance: evidence from Chilean plants," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1384-1400, November. [Downloadable!] (restricted)
  3. James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Aronsson, Thomas & Koskela, Erkki, 2009. "Optimal Income Taxation, Outsourcing and Policy Cooperation in a Dynamic Economy," UmeÃ¥ Economic Studies 784, Umeå University, Department of Economics. [Downloadable!]
  5. Bruno S. Frey & Paolo Pamini, 2009. "Making world heritage truly global: the culture certificate scheme," IEW - Working Papers iewwp419, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  6. Pierre M. Picard & David E. Wildasin, 2009. "Labor Market Pooling, Outsourcing and Labor Contracts," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  7. Vidar Christiansen & Stephen Smith, 2009. "Externality-correcting Taxes and Regulation," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  8. Gustafsson, Peter & Segerstrom, Paul, 2006. "Trade Liberalization and Productivity Growth," CEPR Discussion Papers 5894, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Rüdiger Pethig & Frieder Kolleß, 2009. "Asymmetric capital-tax competition, unemployment and losses from capital market integration," MAGKS Papers on Economics 200940, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung). [Downloadable!]
    Other versions:
  10. Joel Slemrod, 2009. "Old George Orwell Got it Backward: Some Thoughts on Behavioral Tax Economics," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  11. Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2004. "Entry and Productivity Growth: Evidence from Microlevel Panel Data," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 265-276, 04/05. [Downloadable!] (restricted)
  12. 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)
    Other versions:
  13. Fernandes, Ana M., 2007. "Trade policy, trade volumes and plant-level productivity in Colombian manufacturing industries," Journal of International Economics, Elsevier, vol. 71(1), pages 52-71, March. [Downloadable!] (restricted)
    Other versions:
  14. repec:fth:bosecd:110 is not listed on IDEAS
  15. Rüdiger Pethig & Christian Wittlich, 2009. "Interaction of carbon reduction and green energy promotion in a small fossil-fuel importing economy," Volkswirtschaftliche Diskussionsbeitraege 131-09, Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht. [Downloadable!]
    Other versions:
  16. Sebastian Gechert, 2009. "Supplementary Private Health Insurance in Selected Countries: Lessons for EU Governments?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  17. Jan-Egbert Sturm & Jakob de Haan, 2009. "Does Central Bank Communication really Lead to better Forecasts of Policy Decisions? New Evidence Based on a Taylor Rule Model for the ECB," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  18. Alessandro Balestrino, 2009. "Kind of Black: The Musicians' Labour Market in Italy," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  19. John Beirne & Guglielmo Maria Caporale & Marianne Schulze-Ghattas & Nicola Spagnolo, 2009. "Global and Regional Spillovers in Emerging Stock Markets: A Multivariate GARCH-in-mean Analysis," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  20. Mirco Tonin & Michael Vlassopoulos, 2009. "Disentangling the Sources of Pro-social Behavior in the Workplace: A Field Experiment," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  21. Mary Hallward-Driemeier & Giuseppe Iarossi & Kenneth L. Sokoloff, 2002. "Exports and Manufacturing Productivity in East Asia: A Comparative Analysis with Firm-Level Data," NBER Working Papers 8894, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  22. Mario Larch & Wolfgang Lechthaler, 2009. "Comparative Advantage and Skill-specific Unemployment," Kiel Working Papers 1538, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  23. Leif Danziger, 2009. "Endogenous Monopsony and the Perverse Effect of the Minimum Wage in Small Firms," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  24. Gerlinde Fellner & Rupert Sausgruber & Christian Traxler, 2009. "Testing Enforcement Strategies in the Field: Legal Threat, Moral Appeal and Social Information," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2009_31, Max Planck Institute for Research on Collective Goods. [Downloadable!]
    Other versions:
  25. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm-level Data," The World Economy, Blackwell Publishing, vol. 30(1), pages 60-82, 01. [Downloadable!] (restricted)
    Other versions:
  26. Eaton, Jonathan & Kortum, Samuel, 2001. "Technology, trade, and growth: A unified framework," European Economic Review, Elsevier, vol. 45(4-6), pages 742-755, May. [Downloadable!] (restricted)
    Other versions:
  27. Larry S. Karp, 2009. "Sacrifice, Discounting and Climate Policy: Five Questions," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  28. Sebastian G. Kessing, 2009. "Federalism and Accountability with Distorted Election Choices," Volkswirtschaftliche Diskussionsbeitraege 130-09, Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht. [Downloadable!]
    Other versions:
  29. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages F134-F161, 02. [Downloadable!] (restricted)
  30. Stefan Voigt & Lorenz Blume, 2009. "The Economic Effects of Federalism and Decentralization – A Cross-Country Assessment," MAGKS Papers on Economics 200905, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung). [Downloadable!]
    Other versions:
  31. Alla Lileeva & Daniel Trefler, 2007. "Improved Access to Foreign Markets Raises Plant-Level Productivity ... for Some Plants," NBER Working Papers 13297, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  32. Chrysovalantou Milliou & Apostolis Pavlou, 2009. "Upstream Horizontal Mergers and Efficiency Gains," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  33. Marianna Belloc & Samuel Bowles, 2009. "International Trade, Factor Mobility and the Persistence of Cultural-Institutional Diversity," Working Papers 2009-08, University of Massachusetts Amherst, Department of Economics. [Downloadable!]
  34. David S. Jacks & Christopher M. Meissner & Dennis Novy, 2009. "Trade Booms, Trade Busts, and Trade Costs," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  35. Choudhry Tanveer Shehzad & Jakob de Haan & Bert Scholtens, 2009. "Growth and Earnings Persistence in Banking Firms: A Dynamic Panel Investigation," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  36. Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-93, June. [Downloadable!] (restricted)
  37. Choi, E Kwan & Harrigan, James, 2004. "Handbook of International Trade," Staff General Research Papers 11375, Iowa State University, Department of Economics.
  38. Nannette Lindenberg & Frank Westermann, 2009. "How Strong is the Case for Dollarization in Costa Rica? A Note on the Business Cycle Comovements with the United States," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  39. Francesco Cinnirella & Joachim Winter, 2009. "Size Matters! Body Height and Labor Market Discrimination: A Cross-European Analysis," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  40. Noussair, C.N. & Tan, F., 2009. "Voting on Punishment Systems Within a Heterogeneous Group," Discussion Paper 2009-19, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  41. Thomas Aronsson & Erkki Koskela, 2009. "Optimal Income Taxation, Outsourcing and Policy Cooperation in a Dynamic Economy," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  42. Danziger, Leif, 2009. "Endogenous Monopsony and the Perverse Effect of the Minimum Wage in Small Firms," IZA Discussion Papers 4320, Institute for the Study of Labor (IZA). [Downloadable!]
  43. Nicole Grunewald & Inmaculada Martínez-Zarzoso, 2009. "Driving Factors of Carbon Dioxide Emissions and the Impact from Kyoto Protocol," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  44. Eytan Sheshinski, 2009. "Uncertain Longevity and Investment in Education," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  45. Caterina Liesegang & Marco Runkel, 2009. "Corporate Income Taxation of Multinationals and Fiscal Equalization," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  46. Birgit Bednar-Friedl & Karl Farmer, 2009. "Internationally Coordinated Emission Permit Policies: An Option for Withdrawers from the Kyoto Protocol?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  47. Olaf Posch, 2009. "Explaining Output Volatility: The Case of Taxation," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  48. Daniel Gros, 2009. "Global Welfare Implications of Carbon Border Taxes," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  49. Beatrice Scheubel & Daniel Schunk & Joachim Winter, 2009. "Don't Raise the Retirement Age! An Experiment on Opposition to Pension Reforms and East-West Differences in Germany," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  50. Louis N. Christofides & Michael Hoy & Ling Yang, 2008. "The Gender Imbalance in Participation in Canadian Universities (1977-2005)," University of Cyprus Working Papers in Economics 5-2008, University of Cyprus Department of Economics. [Downloadable!]
    Other versions:
  51. Eduardo Strube & Marcelo Resende, 2009. "Complementarity of Innovation Policies in the Brazilian Industry: An Econometric Study," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  52. Bee Yan Aw & Mark J. Roberts & Tor Winston, 2007. "Export Market Participation, Investments in R&D and Worker Training, and the Evolution of Firm Productivity," The World Economy, Blackwell Publishing, vol. 30(1), pages 83-104, 01. [Downloadable!] (restricted)
  53. Leif Danziger, 2009. "Noncompliance and the Effects of the Minimum Wage on Hours and Welfare in Competitive Labor Markets," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  54. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: An Inverted-U Relationship," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 701-728, May.
    Other versions:
  55. Danziger, Leif, 2009. "Noncompliance and the Effects of the Minimum Wage on Hours and Welfare in Competitive Labor Markets," IZA Discussion Papers 4408, Institute for the Study of Labor (IZA). [Downloadable!]
  56. Eytan Sheshinski, 2009. "Uncertain Longevity and Investment in Education," Discussion Paper Series dp520, Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem. [Downloadable!]
  57. Gary Burtless, 2009. "Lessons of the Financial Crisis for the Design of National Pension Systems," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  58. Cramton, Peter C & Palfrey, Thomas R, 1990. "Cartel Enforcement with Uncertainty about Costs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 17-47, February. [Downloadable!] (restricted)
    Other versions:
  59. Daniel G. Arce & Dan Kovenock J. & Brian Roberson, 2009. "Suicide Terrorism and the Weakest Link," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Full references

Cited by:
(explanations, 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. Peter Friedrich & Chang Woon Nam & Janno Reiljan, 2009. "Local Fiscal Equalization in Estonia: Is a Reform Necessary?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  2. Bas Jacobs & Dirk Schindler, 2009. "On the Desirability of Taxing Capital Income to Reduce Moral Hazard in Social Insurance," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Thiess Buettner & Clemens Fuest, 2009. "The Role of the Corporate Income Tax as an Automatic Stabilizer," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Michael Stimmelmayr, 2009. "Wage Inequality in Germany: Disentangling Demand and Supply Effects," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  5. Hans Gersbach & Noemi Hummel, 2009. "Climate Policy and Development," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. Horst Raff & Joachim Wagner, 2009. "Intra-Industry Adjustment to Import Competition: Theory and Application to the German Clothing Industry," Kiel Working Papers 1557, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? Over 1000 institutions contribute their bibliographic data directly to this service.

This page was last updated on 2009-11-24.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.