From a firm’s perspective two competing forces are driving the decision to invest in innovation. On the one hand …, innovative performance is an important driver of profitability and growth. On the other hand, investments in innovation suffer …

product groups but different quality, which is not matched by the predictions of traditional and new trade theory. This paper … analyzes a model of North-South trade and endogenous growth through innovation and imitation that can predict the observed … both the innovation in the North and the imitational lag of the South. Opening to trade increases the growth rate and …