This paper studies the consequences of parallel import (PI) on process innovation of firms heterogeneous in their …. The impact of PI on innovation is determined by the degree of heterogeneity between firms and trade costs. Increasing … market, hence increases its innovation efforts. A tariff policy accompanied by opening borders to PI only increases welfare …

increase their innovation efforts; thirdly, it increases the degree of product market competition. In this paper, we propose a … shaping the aggregate welfare gains from trade. We introduce ?firm heterogeneity into an innovation-driven growth model where … incumbent fi?rms operating in oligopolistic industries perform cost-reducing innovation. In this environment, trade …