Trade, Firm Selection and Innovation: The Competition Channel

• 成果类型: Article
• 署名作者: Impullitti, Giammario; Licandro, Omar
• 署名单位: University of Nottingham; Consejo Superior de Investigaciones Cientificas (CSIC); CSIC - Institut d'Analisi Economica (IAE)
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12466
• 发表日期: 2018
• 页码: 189-229
• 关键词: research-and-development; market-structure; GROWTH; PRODUCTIVITY; welfare; IMPACT; COSTS; MODEL; imports; markups

摘要

We study the welfare gains from trade in an economy with heterogeneous firms, variable markups and endogenous growth. Variable markups arise from oligopolistic competition, and cost-reducing innovation is the engine of long-run growth. Trade liberalisation stiffens competition by reducing markups, generating tougher firm selection and increasing the aggregate productivity level. Selection increases firms' incentives to innovate, thereby leading to a higher aggregate productivity growth rate. Endogenous productivity growth boosts the selection gains from trade, leading to substantial welfare improvements. A calibrated version of the model shows that growth doubles the welfare gains obtainable in models with static firm-level productivity.