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• W3090786521 abstract "Abstract We argue that the recent increases in market concentration and markups are partly due to an ‘innovation feedback effect’ of globalisation. Lower trade costs increase innovation incentives for global firms. As the winners of the ensuing innovation race increase their technological advantage, concentration and markups rise. We develop an endogenous growth model capturing this effect and calibrate it to US manufacturing data. We find that the increase in trade between 1989 and 2007 raised the aggregate markup by 3.5 percentage points. This is entirely due to innovation: without the innovation response, markups would have fallen by 4 percentage points." @default.
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• W3090786521 date "2022-11-25" @default.
• W3090786521 modified "2023-10-05" @default.
• W3090786521 title "International Trade and Innovation Dynamics with Endogenous Markups" @default.
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• W3090786521 doi "https://doi.org/10.1093/ej/ueac085" @default.
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