Trade Liberalisation, Process and Product Innovation, and Relative Skill Demand

Sebastian Braun

No 06-004, JEPS Working Papers from JEPS

Abstract: The interaction between trade liberalisation, product and process innovation, and relative skill demand is analysed in a model of international oligopoly. Lower trading barriers increase the degree of foreign competition. The competing enterprises respond by investing more aggressively in lowering marginal costs of production. Moreover, firms reduce the substitutability of their products through additional investment in product innovation. The paper also shows that the relative demand for skilled workers may increase as a result.

Keywords: Intra-industry trade; process innovation; product innovation; relative skill demand; trade liberalisation (search for similar items in EconPapers)
JEL-codes: F12 F15 F16 O32 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2006-10
New Economics Papers: this item is included in nep-ino, nep-int and nep-mic
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Working Paper: Trade liberalisation, process and product innovation, and relative skill demand (2007)
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