Roy, Soma; Acharyya, Rajat - In: Journal of Economic Development 34 (2009) 1, pp. 81-98
We examine the implication of direct and indirect foreign competition on domestic innovation decision. In most of the … innovation by the home firm will be discouraged at high tariffs under the threat of DFI. Again at low tariff rates exports by the … foreign firm make market competition more intense and reduce the incentive for innovation. Hence the home firm always (never …