We examine the role of host countries’ academic research strengths in global R&D location decisions bymultinational firms. While we expect that a firm’s propensity to perform R&D in a host country increases with the strength of local academic research, firms are expected to be...

We construct a model of firm dynamics with heterogeneous productivity and distortions. The productivity distribution evolves endogenously as the result of the decisions of firms seeking to upgrade their productivity over time. Firms can adopt two strategies toward that end: imitation and...