Artikel

CREDIT CONSTRAINTS, ENDOGENOUS INNOVATIONS, AND PRICE SETTING IN INTERNATIONAL TRADE

This article analyzes the role of credit frictions in a trade model where producers differ in their capabilities to conduct process and quality innovations and require external finance for investments. Accounting for cost‐based and quality‐based sorting of firms in a unified framework allows us to demonstrate that the reactions of prices and commonly used productivity measures do not necessarily reflect welfare implications. Credit frictions lead to distortions through aggravated access to finance and endogenous price adjustments so that the responses of quantity‐based and revenue‐based productivity differ substantially. In counterfactual scenarios, we show that these differential effects are quantitatively important.

Language
Englisch

Bibliographic citation
Journal: International Economic Review ; ISSN: 1468-2354 ; Volume: 64 ; Year: 2023 ; Issue: 4 ; Pages: 1715-1747 ; Hoboken, NJ: Wiley

Classification
Wirtschaft

Event
Geistige Schöpfung
(who)
Eckel, Carsten
Unger, Florian
Event
Veröffentlichung
(who)
Wiley
(where)
Hoboken, NJ
(when)
2023

DOI
doi:10.1111/iere.12651
Last update
10.03.2025, 11:45 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Artikel

Associated

  • Eckel, Carsten
  • Unger, Florian
  • Wiley

Time of origin

  • 2023

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