The Impact of Trade Liberalization on Firm Productivity and Innovation
Name
699932.pdf
Description
Published version
Size
292.71 KB
Format
Adobe PDF
Checksum (MD5)
c1386200a9547edc9ff0bfc2a57fdec6
Author(s)
Shu, Pian
Steinwender, Claudia
Date Issued
2019
Journal
Innovation Policy and the Economy
Publisher
University of Chicago Press
Version
Final published version
Abstract
© 2019 by the National Bureau of Economic Research. All rights reserved. This chapter reviews the empirical economics literature on the impact of trade liberalization on firms’ innovation-related outcomes. We define and examine four types of shocks to trade flows: import competition, export opportunities, access to imported intermediates, and foreign input competition. Our review reveals interesting heterogeneities at the country and firm levels. In emerging countries, trade liberalization appears to spur productivity and innovation. In developed countries, export opportunities and access to imported intermediates tend to encourage innovation, but the evidence on import competition is mixed, especially for firms in the United States. At the firm level, the positive effects of trade on innovation are more pronounced at the initially more productive firms, while the negative effects are more pronounced at the initially less productive firms.
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1086/699932
