Arbeitspapier
Innovation, trade, and finance
This paper proposes a model where heterogeneous firms choose whether to undertake R&D or not. Innovative firms are more productive, have larger investment opportunities and lower own funds for necessary tangible continuation investments than non-innovating firms. As a result, they are financially constrained while standard firms are not. The efficiency of the financial sector and a country's institutional quality relating to corporate finance determine the share of R&D intensive firms and their comparative advantage in producing innovative goods. We illustrate how protection, R&D subsidies, and financial sector development improve access to external finance in distinct ways, support the expansion of innovative industries, and boost national welfare. International welfare spillovers depend on the interaction between terms of trade effects and financial frictions and may be positive or negative, depending on foreign countries' trade position.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 3529
- Classification
-
Wirtschaft
Neoclassical Models of Trade
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Entrepreneurship
Technological Change: Government Policy
- Subject
-
innovation
financial development
R&D subsidies
protection
Innovation
Industrielle Forschung
Innovationspolitik
Wohlfahrtseffekt
Internationaler Wettbewerb
Mehr-Sektoren-Modell
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Egger, Peter
Keuschnigg, Christian
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2011
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Egger, Peter
- Keuschnigg, Christian
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2011
Other Objects (12)
Economic Integration in Trade and FDI. Dynamic Considerations of Potentials and Adjustment
An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials
World-Trade Growth Accounting
Public Export Guarantees and Foreign Trade Structure
Outsourcing and trade in a spatial world
On the Problem of Endogenous Unobserved Effects in the Estimation of Gravity Models
Transportation Costs in a Multilateral World. Assessing the Poolability of Gravity Data
A Note on the Proper Econometric Specification of the Gravity Equation
Market Power, Multinationality and Intra-EU Industry Exports in the 1990s
SUR Estimation of Error Components Models With AR(1) Disturbances and Unobserved Endogenous Effects
European Exports and Outward Foreign Direct Investment. A Dynamic Panel Data Approach
The language effect in international trade: A meta-analysis
Economic Integration in Trade and FDI. Dynamic Considerations of Potentials and Adjustment
An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials
World-Trade Growth Accounting
Public Export Guarantees and Foreign Trade Structure
Outsourcing and trade in a spatial world
On the Problem of Endogenous Unobserved Effects in the Estimation of Gravity Models
Transportation Costs in a Multilateral World. Assessing the Poolability of Gravity Data
A Note on the Proper Econometric Specification of the Gravity Equation
Market Power, Multinationality and Intra-EU Industry Exports in the 1990s
SUR Estimation of Error Components Models With AR(1) Disturbances and Unobserved Endogenous Effects
European Exports and Outward Foreign Direct Investment. A Dynamic Panel Data Approach
The language effect in international trade: A meta-analysis
Economic Integration in Trade and FDI. Dynamic Considerations of Potentials and Adjustment
An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials
World-Trade Growth Accounting
Public Export Guarantees and Foreign Trade Structure
Outsourcing and trade in a spatial world
On the Problem of Endogenous Unobserved Effects in the Estimation of Gravity Models
Transportation Costs in a Multilateral World. Assessing the Poolability of Gravity Data
A Note on the Proper Econometric Specification of the Gravity Equation
Market Power, Multinationality and Intra-EU Industry Exports in the 1990s
SUR Estimation of Error Components Models With AR(1) Disturbances and Unobserved Endogenous Effects
European Exports and Outward Foreign Direct Investment. A Dynamic Panel Data Approach