Entwicklungsländern auf Handelsliberalisierung reagieren. Bei imperfekten Kapitalmärkten kann eine solche Liberalisierung kleinen und …

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for … 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 …

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for … 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 …

in process R&D. The novelty is that if a firm invests more R&D its expected innovation return hazard rate stochastically … liberalization. As a result the aggregate productivity is affected by a reallocation of resources to more productive firms and a …