TY  - JOUR
AU  - Shu, Pian
AU  - Steinwender, Claudia
TI  - The Impact of Trade Liberalization on Firm Productivity and Innovation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 24715
PY  - 2018
Y2  - June 2018
DO  - 10.3386/w24715
UR  - http://www.nber.org/papers/w24715
L1  - http://www.nber.org/papers/w24715.pdf
N1  - Author contact info:
Pian Shu
800 West Peachtree Street N.W.
Scheller College of Business
Atlanta, GA 30308-1149
Georgia
E-Mail: pian.shu@scheller.gatech.edu

Claudia Steinwender
MIT Sloan School of Management
100 Main Street, E62-521
Cambridge, MA 02142
Tel: 617/253-7974
E-Mail: csteinwe@mit.edu
M1  - published as Pian Shu, Claudia Steinwender. "The Impact of Trade Liberalization on Firm Productivity and Innovation," in Josh Lerner and Scott Stern, editors, "Innovation Policy and the Economy, Volume 19" University of Chicago Press (2019)

M3  - presented at "Innovation Policy and the Economy 2018", April 17, 2018
AB  - This chapter reviews the empirical economics literature on the impact of trade liberalization on firms' innovation-related outcomes. We define and examine four types of shocks to trade flows: import competition, export opportunities, access to imported intermediates, and foreign input competition. Our review reveals interesting heterogeneities at the country and firm levels. In emerging countries, trade liberalization appears to spur productivity and innovation. In developed countries, export opportunities and access to imported intermediates tend to encourage innovation, but the evidence on import competition is mixed, especially for firms in the United States. At the firm level, the positive effects of trade on innovation are more pronounced at the initially more productive firms while the negative effects are more pronounced at the initially less productive firms.
ER  -