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Innovation and Trade Policy in a Globalized World

Ufuk Akcigit (), Sina T. Ates () and Giammario Impullitti

Working Papers from eSocialSciences

Abstract: How do import tariffs and R&D subsidies help domestic firms compete globally? How do these policies affect aggregate growth and economic welfare? To answer these questions, the paper builds a dynamic general equilibrium growth model where firm innovation endogenously determines the dynamics of technology, and, therefore, market leadership and trade flows, in a world with two large open economies at different stages of development. Firms’ R&D decisions are driven by (i) the defensive innovation motive, (ii) the expansionary innovation motive, and (iii) technology spillovers. The theoretical investigation illustrates that, statically, globalization (defined as reduced trade barriers) has ambiguous effects on welfare, while, dynamically, intensified globalization boosts domestic innovation through induced international competition.

Keywords: eSS; innovation; trade policy; globalized world; globalization; competition; economic welfare; growth; equilibrium growth model; technology; leadership; market; markt leadership; defensive innovation motive; domestic innovation; international competition. (search for similar items in EconPapers)
Date: 2018-05
Note: Institutional Papers
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Related works:
Working Paper: Innovation and Trade Policy in a Globalized World (2018) Downloads
Working Paper: Innovation and Trade Policy in a Globalized World (2018) Downloads
Working Paper: Innovation and trade policy in a globalized world (2018) Downloads
Working Paper: Innovation and Trade Policy in a Globalized World (2018) Downloads
Working Paper: Innovation and Trade Policy in a Globalized World (2018) Downloads
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