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Trade Liberalization, Competition and Growth

Omar Licandro () and Antonio Navas ()

No 2008-03, Working Papers from FEDEA

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 speciffic R&D and a continuum of oligopolistic sectors under Cournot competition. Since countries produce the same setof 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.

Date: 2008-01
New Economics Papers: this item is included in nep-com, nep-cse, nep-int and nep-mic
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Journal Article: Trade Liberalization, Competition and Growth (2011) Downloads
Working Paper: Trade Liberalization, Competition and Growth (2010) Downloads
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Working Paper: Trade Liberalization, Competition and Growth (2007) Downloads
Working Paper: Trade liberalization, competition and growth (2007) Downloads
Working Paper: TRADE LIBERALIZATION, COMPETITION AND GROWTH (2007) Downloads
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