In the context of digitalized markets, the high-tech firm’s technological innovation performing is discouraging because they can’t always leverage the synergies of digital technology with their legacy technologies effectively. Given this situation, we firstly construct four digital...

We study the role of labor market mismatch in the adjustment to a trade liberalization that results in the offshoring of high-tech production. Our model features two-sided heterogeneity in the labor market: high- and low-skilled workers are matched in a frictional labor market with high- and...