Endogenous Growth and Trade Liberalization Between Small and Large Countries

Hans Jarle Kind

Review of International Economics, 2002, vol. 10, issue 1, 151-165

Abstract: The paper combines insight from new trade theory and R&D‐based endogenous growth models to argue that there are ambiguous growth effects of trade liberalization between countries that differ in terms of the size of their home markets. In particular, trade liberalization may reduce R&D incentives in countries with low purchasing power without invoking parallel increases in countries with high purchasing power. The paper also considers the case of imperfect international knowledge spillovers, and demonstrates that complete trade liberalization may affect the growth rate negatively.

Date: 2002
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https://doi.org/10.1111/1467-9396.00324

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Working Paper: Endogenous Growth and Trade Liberalization Between Small and Large Countries (1997)
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