Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74878
Authors: 
Song, Huasheng
Vandenbussche, Hylke
Year of Publication: 
2008
Series/Report no.: 
LICOS Discussion Paper 200
Abstract: 
This paper develops a model where firms across countries differ in their capacity to innovate. Our main goal is to study firm level innovation under various trade policy shocks. We consider two countries where firms across countries are heterogeneous in their innovation efficiencies. We find that the benefits of trade liberalization and trade protection differ across firms. One of the main results we obtain is that trade protection hurts the productivity of highly efficient firms while it increases the productivity of lowly efficient firms. The predictions of our model are in line with recent empirical evidence that while trade protection fosters the productivity of lowly efficient firms, it reduces productivity of highly efficient firms.
Subjects: 
Trade Policy
Innovation
Exports
JEL: 
F12
F13
L13
Document Type: 
Working Paper

Files in This Item:
File
Size
130.38 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.