Trade Liberalization, Competition and Growth
Omar Licandro (licandro.omar@gmail.com) and
Antonio Navas-Ruiz
No 6500, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
The aim of this paper is to understand whether international trade may enhance innovation and growth through an increase in competition. We develop a two-country endogenous growth model, both countries producing the same set of goods, with firm specific R&D and a continuum of oligopolistic sectors under Cournot competition. Since countries produce the same set of goods, trade openness makes markets more competitive, reducing prices and raising the incentives to innovate. More general, a reduction on trade barriers enhances growth by reducing domestic firms market power.
Keywords: Competition and growth; R&d; Trade openness (search for similar items in EconPapers)
JEL-codes: F13 F43 O3 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-com, nep-cse, nep-int and nep-mic
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Citations: View citations in EconPapers (6)
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Related works:
Journal Article: Trade Liberalization, Competition and Growth (2011)
Working Paper: Trade Liberalization, Competition and Growth (2010)
Working Paper: Trade Liberalization, Competition and Growth (2010)
Working Paper: Trade Liberalization, Competition and Growth (2008)
Working Paper: Trade liberalization, competition and growth (2007)
Working Paper: TRADE LIBERALIZATION, COMPETITION AND GROWTH (2007)
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