Does Import Competition Induce R D Reallocation Evidence From The U S

We analyze the impact of rising import competition from China on U.S. innovative activities. Using Compustat data, we find that import competition induces R&D expenditures to be reallocated towards more productive and more profitable firms within each industry. Such reallocation effect has the potential to offset the average drop in firm-level R&D identified in the previous literature. Indeed, our quantitative analysis shows no adverse impact of import competition on aggregate R&D expenditures. Taking the analysis beyond manufacturing, we find that import competition has led to reallocation of researchers towards booming service industries, including business and repairs, personal services, and financial services.

A proposal for moving from price-centric to innovation-centric competition policy, reviewing theory and evidence on economic incentives for innovation. Competition policy and antitrust enforcement have traditionally focused on prices rather than innovation. Economic theory shows the ways that price competition benefits consumers, and courts, antitrust agencies, and economists have developed tools for the quantitative evaluation of price impacts. Antitrust law does not preclude interventions to encourage innovation, but over time the interpretation of the laws has raised obstacles to enforcement policies for innovation. In this book, economist Richard Gilbert proposes a shift from price-centric to innovation-centric competition policy. Antitrust enforcement should be concerned with protecting incentives for innovation and preserving opportunities for dynamic, rather than static, competition. In a high-technology economy, Gilbert argues, innovation matters. Gilbert considers both theory and available empirical evidence on the relationships among market structure, firm behavior, and the production of new products and services. He reviews the distinctive features of the high-tech economy and why current analytical tools used by antitrust enforcers aren't up to the task of assessing innovation concerns. He considers, from the perspective of innovation competition, Kenneth Arrow's “replacement effect” and the Schumpeterian theory of market power and appropriation; discusses the effect of mergers on innovation and future price competition; and reviews the empirical literature on competition, mergers, and innovation. He describes examples of merger enforcement by US and European antitrust agencies; examines cases brought against Microsoft and Google; and discusses the risks and benefits of interoperability standards. Finally, he offers recommendations for competition policy. The open access edition of this book was made possible by generous funding from Arcadia – a charitable fund of Lisbet Rausing and Peter Baldwin.

Latin America and the Caribbean (LAC) has made slow but consistent progress addressing the imbalances induced by the pandemic in an international environment that is just now showing signs of stabilizing. Despite favorable macroeconomic management, high interest rates and fiscal imbalances remain challenging while growth rates remain lackluster due to long-standing structural issues. Looking forward, an aging workforce and rising violence will increasingly complicate policy. This report focuses particularly on weak competitive forces as a source of low productivity, low growth, and low welfare in LAC. It emphasizes the need for effective competition institutions, pro-competition regulatory frameworks, complementary policies to improve the capabilities of workers and firms, and enhanced innovation systems, to prepare local industries to reach the technological frontier and face global competition. Furthermore, the report underscores the need for reforms to prevent large businesses from exerting undue political influence over policy decisions.

Economic globalisation and technological change are the two issues that concerned people in the past, concern them today and will concern them in the future - all over the world, poor or rich. Traditionally, questions about allocative effects are asked: What are the labour market implications? Who loses? Who wins? What is the net aggregate welfare effect after an adjustment period? However, two points are rarely taken into consideration: How do globalisation and technological change interact and what are the potential long-run implications for economic growth? This book addresses the interplay of these megatrends. It asks how economic globalisation may affect innovation and technology of individual firms and eventually the growth prospects of countries. Thereby it shows that protectionism not only harms static efficiency but might as well lead to dynamic losses. The book provides a systematic overview of the theoretical underpinnings of the openness-growth nexus and summarises the conceptual problems and important findings of the empirical analyses so far. The theoretical insights are supported by two empirical studies, the first dealing with the innovative behaviour and the “within-multinational” technology transfer of Spanish firms that were acquired by foreign companies and the second analysing productivity growth rate implications from exporting for German manufacturing firms.​

Will technological improvement and growth in the rest of the world cause a decline in American living standards? Can government policy in Japan and Western Europe limit the availability of high- wage jobs in America? Does expanding trade with Mexico and other developing countries with large numbers of inexpensive workers imply a continuing decline in wages for low-skilled American workers? These questions express a widespread concern about potential negative effects of import competition on domestic labor markets, but ignore potential gains to U.S. workers from exports abroad. Through U.S. exports, the rest of the world is an increasingly large indirect employer of U.S. workers, and through imports, foreign labor is an increasingly important potential substitute for U.S. workers. Bringing together the often diverse perspectives of international economists, labor economists, and policymakers, this volume analyzes how international trade affects the level and distribution of wages and employment in the United States, examines the need for government intervention, and evaluates policy options. In addition to the editor, the contributors are Jagdish Bhagwati, Columbia University and American Enterprise Institute; J. Bradford De Long, U.S. Department of the Treasury and University of California, Berkeley; I. M. Destler, University of Maryland and Institute for International Economics; Richard B. Freeman, Harvard University and London School of Economics; Louis Jacobson, WESTAT; Lori G. Kletzer, University of California, Santa Cruz; Edward Leamer, University of California, Los Angeles; Michael Piore, Massachusetts Institute of Technology; Ana Revenga and Claudio Montenegro, The World Bank; Jeffrey D. Sachs and Howard Shatz, Harvard University.

The book provides theoretical and empirical evidence on how world trade evolves, how trade affects resource allocation, how trade competition affects productivity, how China shock affects world trade and how trade affects large and small countries. It is a useful reference which focuses on new approaches to international trade by looking into country-specific as well as firm-product level-specific cases.

Non-Tariff Barriers, Regionalism and Poverty is a collection of key articles in three important areas of applied international trade research: measuring non-tariff barriers and their effects, the consequences of regional trading arrangements, especially on the countries excluded from them, and the connection between international trade and poverty. Drawing from 30 years of research and experience, L Alan Winters illustrates the development of techniques of this field and his continued commitment to answering real policy questions at the times at which they are debated. The collection shows the ways in which economic and econometric analysis can be used to answer real-world problems rigorously in the area of international trade and trade policy. Readers will find that some of the research included is of current methodological relevance and some of more historical significance. This volume is invaluable to anyone who is keen on developing their knowledge on trade policy, regionalism or poverty — three pressing issues in today's globalized world. Contents:IntroductionNon-Tariff Barriers:The Extent of Nontariff Barriers to Industrial Countries' Imports (with JJ Nogués and A Olechowski)Do Exporters Gain from VERs? (with J de Melo)Labour Adjustment Costs and British Footwear Protection (with WE Takacs)Voluntary Export Restraints and Rationing: U.K. Leather Footwear Imports from Eastern Europe (with PA Brenton)VERs and Expectations: Extensions and EvidenceDigging for Victory: Agricultural Policy and National SecurityRegionalism:Separability and the Specification of Foreign Trade FunctionsBritish Imports of Manufactures and the Common MarketRegionalism and the Rest of the World: The Irrelevance of the Kemp-Wan TheoremHow Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR (with W Chang)Trade and Economic Geography: The Impact of EEC Accession on the UK (with HG Overman)Trade and Poverty:Trade Liberalisation and Poverty: What are the Links?Trade Liberalization and Poverty: The Evidence So Far (with N McCulloch and A McKay)Trade Liberalisation and Economic Performance: An OverviewTrade Liberalisation and Poverty Dynamics in Vietnam (with Y Niimi and P Vasudeva Dutta)Agricultural Trade Liberalization and Poverty Dynamics in Three Developing Countries (with J Litchfield and N McCulloch)Why Isn't the Doha Development Agenda More Poverty Friendly? (with TW Hertel, R Keeney, and M Ivanic)Trade as an Engine of Creative Destruction: Mexican Experience with Chinese Competition (with L Iacovone and F Rauch) Readership: Undergraduates, research students and professionals interested in macroeconomics; international trade practitioners. Key Features:Shows the ways in which economic and econometric analysis can be used to answer real-world problems rigorously in the area of international trade and trade policyThe broad collection of applied work on trade illustrates problems and analyses that others may find a useful base for their own workKeywords:International Trade;Poverty;Regional Trading Arrangements (RTAs);Trade Barriers;Non-Tariff Barriers

Age of Productivity offers a look at how the low productivity in Latin America and the Caribbean is preventing the region from catching up with the developed world. The authors look beyond the traditional macro explanations and dig all the way down to the industry and firm level to uncover the causes.