Since innovative firms are often financially constrained, access to external funds is important for the expansion of innovative industries. This paper reports four important results. First, comparative advantage is shaped by factor endowments as well as fundamental determinants of corporate...

This paper proposes a model where heterogeneous firms choose whether to undertake R&D or not. Innovative firms are more productive, have larger investment opportunities and lower own funds for necessary tangible continuation investments than non-innovating firms. As a result, they are...

We develop a general equilibrium model of trade with multiple countries and industries in the spirit of Eaton and Kortum (2002) and Bernard, Eaton, Jensen, and Kortum (2003). We structurally estimate the parameters of the model and calibrate it to data on 33 OECD countries and one country that...

This paper proposes a model where heterogeneous firms choose whether to undertake R&D or not. Innovative firms are more productive, have larger investment opportunities and lower own funds for necessary tangible continuation investments than non-innovating firms. As a result, they are...

We develop a general equilibrium model of trade with multiple countries and industries in the spirit of Eaton and Kortum (2002) and Bernard, Eaton, Jensen, and Kortum (2003). We structurally estimate the parameters of the model and calibrate it to data on 33 OECD countries and one country that...

Heterogeneous firms invest in R&D and expansion investment. Venture capital specializes in R&D financing where problems are largest. Marginal firms get funded by venture capital, while firms with larger debt capacity obtain cheaper bank financing. In the latestage, cash-rich firms invest at an...

This paper proposes a model where heterogeneous firms choose whether to undertake R&D or not. Innovative firms are more productive, have larger investment opportunities and lower own funds for necessary tangible continuation investments than non-innovating firms. As a result, they are...