. Adopting new production technologies and realizing synergy effects might allow cost reduction, product innovation and product … upgrading. Even if GVCs represent a rich environment for innovation activities, the extent to which knowledge is created and … heterogeneous innovation capacities for the firms involved. Differences in the forms of governance underlying buyer …

full characterization of the impact of horizontal innovation on prices, markups, and wages. Our model allows us to make a …

affects the optimal levels of external tariffs and standards, which are chosen by each country, and national welfare. In light …, an FTA makes the member countries to choose more stringent standards. (ii) Regarding the national welfare in each country …

technologically advanced country can impose an import tariff on intermediates to lower foreign wages and increase national welfare. An …-cooperative policy equilibrium, welfare levels of the two countries will fall to their autarky levels. This gives scope for a trade …

competition that maximizes investment of the industry. This feature holds also for consumer surplus and Welfare. In the model …