We consider two channels via which foreign inputs into industrial production may lead to productivity effects. The first one concerns dynamic externalities between firms which share technical and organizational knowledge which is vital for the productivity growth of a particular industry. We...

This article analyzes the adoption and diffusion of new technology in a market for a differentiated product with monopolistic competition. I show that in a noncooperative equilibrium ex ante identical firms adopt a new technology at different dates. This equilibrium can be described by a simple...

We show that the combination of monopolistic competition and input-output linkages generate what we call an input distortion. The distortion arises because material input prices involve a markup over the social opportunity cost. This has so far escaped attention in the literature addressing...