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Looking Backward, Innovating Forward: A Theory of Competitive Cascades

Date: Wednesday, Oct 12, 2022, 16:30 ~ 17:45
Speaker: Daniel Trefler (University of Toronto)
Location: 우석경제관 223동 307호
10월 12일(수)에 진행되는 Daniel Trefler (Rotman School of Management, University of Toronto) 교수님의 Applied Micro 세미나를 안내드립니다. Trefler 교수님는 국제무역분야에서 매우 저명한 학자로 AER, JPE, QJE, JIE 등 해외 저명학술지에 많은 논문을 게재해 오셨고, Google Citation 기준으로 총 11,788번의 인용을 받는 등 학문적으로 매우 큰 영향을 미치고 계신 분입니다(; 

* 주관: 서울대학교 경제학부, 경제연구소 한국경제혁신센터, SSK, BK21

* 본 세미나는 졸업요건(2022-2학기) 및 BK21+(2022-2학기) 세미나 참석으로 인정됩니다.

세미나 참석인정을 원하는 학생은 세미나 종료 후 참석자 명단을 작성해주시기 바랍니다.

Abstract: Innovation depends on exporting and, in particular, on scale and competition in export markets. We develop a theory featuring (1) quality-segmented markets, (2) step-by-step innovation that moves firms forward along the quality ladder, and (3) escape-the-competition motives for innovation. We derive four predictions about the impact on innovation of scale and competition: a firm with a large and less-competitive quality segment ahead or forward of it will have strong incentives to innovate into this profitable segment, while a firm with a small and more-competitive quality segment behind it will also have strong incentives to innovate for fear of facing firms in this segment in the future. We take these predictions to Chinese firm-level data during a period of explosive export growth (2000-2006). Using information about scale and competition by quality segment in China's export markets, we confirm all four hypotheses. By implication, and unlike in standard CES models, the impact of trade on innovation depends critically on how it drives scale and competition in high- versus low-quality segments.
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