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1 septembre 2007
- handle: 10670/1.ueqfli
- halshs: halshs-00354236
info:eu-repo/semantics/OpenAccess
Mots-clés
Trade openess competition and growth R&DSujets proches
Trade Commercial trade Foreign trade Competition (Economics) Economic competition Competitiveness (Economics) Trade TradeCiter ce document
Omar Licandro et al., « TRADE LIBERALIZATION, COMPETITION AND GROWTH », HAL-SHS : économie et finance, ID : 10670/1.ueqfli
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Résumé
The aim of this paper is to understand whether international trade may enhance innovation and growth through an increase in competition.We develop a two-country endogenous growth model, both countries producing the same set of goods, with firm specific R&D and a continuum of oligopolistic sectors under Cournot competition. Since countries produce the same set of goods, trade openness makes markets more competitive, reducing prices and raising the incentives to innovate. More general, a reduction on trade barriers enhances growth by reducing domestic firms'market power.