International Trade and Innovation Dynamics with Endogenous Markups*

• 成果类型: Article
• 署名作者: Cavenaile, Laurent; Roldan-Blanco, Pau; Schmitz, Tom
• 署名单位: University of Toronto; University Toronto Scarborough; Banco de Espana; University of London; Queen Mary University London
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueac085
• 发表日期: 2023
• 页码: 971-1004
• 关键词: labor share; GROWTH; COMPETITION; MARKET; prices; IMPACT; rise

摘要

We argue that the recent increases in market concentration and markups are partly due to an 'innovation feedback effect' of globalisation. Lower trade costs increase innovation incentives for global firms. As the winners of the ensuing innovation race increase their technological advantage, concentration and markups rise. We develop an endogenous growth model capturing this effect and calibrate it to US manufacturing data. We find that the increase in trade between 1989 and 2007 raised the aggregate markup by 3.5 percentage points. This is entirely due to innovation: without the innovation response, markups would have fallen by 4 percentage points.