liberalization. As a result the aggregate productivity is affected by a reallocation of resources to more productive firms and a …

liberalization. As a result, the aggregate productivity is affected by a reallocation of resources to more productive firms and a …

industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with … heterogeneous firms and endogenous R&D. We identify two effects of trade liberalization on productivity: a direct effect through … low (high) trade costs; (ii) increases expected industry productivity; and (iii) raises expected social welfare if trade …

industry productivity. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms … expected industry productivity. The central results of the paper regarding firm and industry level R&D spending differ … significantly from the case of homogeneous firms. -- international trade ; firm heterogeneity ; R&D ; productivity ; market …

autarky to free trade promotes innovation and productivity growth in those sectors which are initially less competitive … productivity divergence: firms that are located in industries with greater exposure to foreign trade, invest a greater amount in R …&D contributing to industry productivity growth. Finally the paper outlines the importance of reallocation effects within industry and …