Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7343323 | Cuadernos de Economía | 2010 | 31 Pages |
Abstract
This paper explores the relationship between trade openness, competition and productivity growth, in a multi-sector R&D endogenous growth model where we allow for sectorial differences in competition levels. A movement from autarky to free trade extends the size of the market but it increases competition within each market. The joint effect rises the output produced per firm, R&D employment and productivity growth. When we allow for sectorial differences, the less competitive sectors obtain larger gains in efficiency, increasing by more R&D investment and productivity growth. Moreover, R&D employment in the most competitive sectors may reduce due to a crowding-out effect from the less competitive sectors: The latter, increases the demand for rival inputs, attracting labor from R&D and production activities of the other sectors.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Antonio Navas Ruiz,