English, Article, Journal or magazine article edition: Explaining Japan's Innovation and Trade: A model of Quality Competition and Dynamic Comparive Advantage Gene M. Grossman

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Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Explaining Japan's Innovation and Trade: A model of Quality Competition and Dynamic Comparive Advantage
Author
  • Gene M. Grossman
Physical Description
  • preprint
Notes
  • In this paper, I develop a model of dynamic comparative advantage based on endogenous innovation. Firms in each of two countries devote resources to R&​D in order to improve the quality of high-technology products. Research successes generate profit opportunities in the world market. The model predicts that a country such as Japan, with abundance of skilled labor and scarcity of natural resources, will specialize relatively in industrial innovation and in the production of high-technology goods. Data are provided to support this prediction. I use the model to explore the effects of R&​D subsidies, production subsidies and trade policies on the long-run rates of innovation in trade partner countries and on the long-run pattern of trade.
  • RePEc:nbr:nberwo:3194
Language
  • English
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