R&amp;D policies, trade and process innovation

Haaland, Jan I.; Kind, Hans Jarle

doi:10.1016/j.jinteco.2007.04.001

Cited by 62 publications

(54 citation statements)

References 15 publications

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“…This is similar to the model of Haaland and Kind (2008) which assumes that outputs and R&D are determined simultaneously by each firm. 7 See also Cramton and Palfrey (1990), Lemma 5 (p. 26 and pp.…”

Section: The Modelmentioning

confidence: 95%

Innovation and trade with heterogeneous firms

Long

Raff²,

Stähler

2011

Journal of International Economics

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This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. We identify two effects of trade liberalization on productivity: a direct effect through changes in R&D investment, and a selection effect due to inefficient firms leaving the market. We show how these effects operate in the short run when market structure is fixed, and in the long run when market structure is endogenous. Among the robust results that hold for any market structure are that trade liberalization (i) increases (decreases) aggregate R&D for low (high) trade costs; (ii) increases expected industry productivity; and (iii) raises expected social welfare if trade costs are low.Keywords: international trade, firm heterogeneity, R&D, productivity, market structure AbstractThis paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. We identify two effects of trade liberalization on productivity: a direct effect through changes in R&D investment, and a selection effect due to inefficient firms leaving the market. We show how these effects operate in the short run when market structure is fixed, and in the long run when market structure is endogenous. Among the robust results that hold for any market structure are that trade liberalization (i) increases (decreases) aggregate R&D for low (high) trade costs; (ii) increases expected industry productivity; and (iii) raises expected social welfare if trade costs are low. JEL classification: F12, F15

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Section: The Modelmentioning

confidence: 95%

Innovation and trade with heterogeneous firms

Long

Raff²,

Stähler

2011

Journal of International Economics

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“…20 We use of three measures of entry regulation from the World Bank: (i) the number of different procedures that a start-up firm needs to go through to get legal status to operate as a firm (ii) the time it takes to obtain legal status to operate as firm (measured in business days) and (iii) the cost of obtaining legal status where these costs cover all identifiable expenses to obtain legal status. Importantly, unofficial costs due to corruption and costs pertaining to bureaucratic inefficiencies are not considered.…”

Section: Dependent Variable: Entry Barriersmentioning

confidence: 99%

“…Brander and Spencer, 1983;Eaton and Grossman, 1986;Grossman and Helpman, 1991;Haaland and Kind, 2008;Leahy and Neary, 2008). This literature has explored how international competition affects the incentives for governments to subsidize incumbent R&D and has identified a "business stealing effect" that increases the incentive for R&D subsidies when international competition increases.…”

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confidence: 99%

Entrepreneurship policy and globalization

Norbäck

Persson

Douhan

2014

Journal of Development Economics

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What explains the world-wide trend of pro-entrepreneurial policies? We study entrepreneurial policy in a lobbying model taking into account the conflict of interest between entrepreneurs and incumbents. It is shown that international market integration leads to more pro-entrepreneurial policies, since it is then (i) more difficult to protect domestic incumbents and (ii) pro-entrepreneurial policies make foreign entrepreneurs less aggressive.Using the World Bank Doing Business database, we find evidence that international openness is negatively correlated with the barriers to entry for new entrepreneurs, as predicted by the theory.JEL codes: L26; L51; O31; F15; D73

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“…As it studies investment in an integrated market, this paper is also related to the work of Haaland and Kind (2008), which looks at R&D subsidies for national firms competing in a third market. Haaland and Kind (2008) focus on the strategic motive for research subsidies: governments could pay excessive subsidies in order to strengthen the position of the national firm in the common market.…”

mentioning

confidence: 99%

“…Haaland and Kind (2008) focus on the strategic motive for research subsidies: governments could pay excessive subsidies in order to strengthen the position of the national firm in the common market. In a similar framework, Leahy and Neary (2009) find that investment subsidies could end up being on the contrary too low if investment has positive spillovers (i.e.…”

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confidence: 99%

Powering Up Developing Countries through Integration?

Auriol

Biancini

2013

The World Bank Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Powering Up Developing Countries through Integration? Terms of use: Documents in AbstractPower market integration is analyzed in a two countries model with nationally regulated firms and costly public funds. If generation costs between the two countries are too similar negative business-stealing outweighs efficiency gains so that following integration welfare decreases in both regions. Integration is welfare-enhancing when the cost difference between the two regions is large enough. The benefit from export profits increases total welfare in the exporting country, while the importing country benefits from lower prices. This is a case where market integration also improves the incentives to invest compared to autarky. The investment levels remain inefficient though. With generation facilities over-investment occurs sometimes, while systematic under-investment occurs for transportation facilities. Free-riding reduces the incentives to invest in these public-good components, while business-stealing tends to reduce the capacity for financing new investment.JEL-Code: L430, L510, F120, F150, R530.

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R&D policies, trade and process innovation

Cited by 62 publications

References 15 publications

Innovation and trade with heterogeneous firms

Innovation and trade with heterogeneous firms

Entrepreneurship policy and globalization

Powering Up Developing Countries through Integration?

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