Innovation, Firm Dynamics, and International Trade

By Andrew Atkeson, Ariel T. Burstein. Journal of Political Economy, 2007

675 citations recorded by the source corpus.

We present a general equilibrium model of the response of firms’ decisions to operate, innovate, and engage in international trade to a change in the marginal cost of international trade. We find that, although a change in trade costs can have a substantial impact on heterogeneous firms’ exit, export, and process innovation decisions, the impact of changes in these decisions on welfare is largely offset by the response of product innovation. Our results suggest that microeconomic evidence on firms’ responses to changes in international trade costs may not be informative about the implications of changes in these trade costs for aggregate welfare.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/a7f32965b5437c228eac7430ded760c0f404e747

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Citations in the corpus

A Global View of Productivity Growth in China (2016, positive): “Moreover, it can be demonstrated that the equilibrium conditions (2) - (5) require”
When Should We Use Unit Fixed Effects Regression Models for Causal Inference with Longitudinal Data? (2019, background): “Atkeson and Burstein (2010) find that changes in trade barriers, such as most favored nations (MFN) tariffs applied to GATT members, will determine forward-looking firms’ reactions to exit, export, and product innovation, which will in turn affect future trade volumes.”
Learning from Trade Through Innovation (2010, positive): “πh(ω) > πl(ω) ⇐⇒ 1 σ E(Pρ)σ−1ωσ−1 ( (φγ + (1− φ))σ−1 − 1 ) > w1−μPμf(η − 1) (6)”
Intermediate input imports and innovations: Evidence from Chinese firms' patent filings (2016, background): “See Atkeson and Burstein (2010) and Burstein and Melitz (2013) for the recent approaches.”
Theories of Heterogeneous Firms and Trade (2011, neutral): “Though Atkeson & Burstein (2010) show that the free entry condition constrains the overall One of the striking features of the Melitz model is that welfare gains from trade still occur even if the mass of varieties available for domestic consumption falls (even if trade reduces product diversity).”
Innovation and exporting: evidence from Spanish manufacturing firms (2010, positive): “In particular, the result in column (2) shows that the probability to export increases with the R&D intensity of an average firm.”
A Unified Theory of Firm Selection and Growth (2009, neutral): “5 4Irarrazabal and Opromolla (2006) and Atkeson and Burstein (2010) develop two-country extensions of Luttmer (2007).”
The Empirics of Firm Heterogeneity and International Trade (2012, background): “See also Atkeson and Burstein (2010) for a theoretical analysis of the relationship between the various possible sources of welfare gains from trade in heterogeneous rm models.”
Does importing more inputs raise exports? Firm-level evidence from France (2013, neutral): “2Few theoretical exceptions introduce endogenous productivity gains determined by R&D investments: Costantini and Melitz (2007), Atkeson and Burstein (2010), Aw, Roberts and Xu (2009) and Bustos (2010).”
Firm entry, trade, and welfare in Zipf's world (2013, positive): “Bernard et al. (2003) also use firm/plant data to calibrate a quantitative trade model with firm-level heterogeneity.”