This paper builds a model of R&D-based growth in which the discovery of higher-quality products is governedby sequential stochastic innovation contests. Incumbent firms producing state-of-the-art-quality productsexpend resources in activities to protect their rents; challengers raise claims to...

The underlying thesis contributes to the international trade literature in several dimensions. Methodologically, a stochastic partial equilibrium model is developed merging concepts from international economics and finance theory. The theoretical model analyzes the first time market entry...