Proximity to the Frontier, Markups, and the Response of Innovation to Foreign Competition: Evidence from Matched Production-Innovation Surveys in Chile

Álvaro Felipe Garcia Marin, Ana Cusolito, William Maloney

Research output: Working paper

Abstract

This paper employs a matched firm production/innovation panel data set from Chile to explore the response of firm innovation to the increased competition arising from the China shock. In addition to covering a wider range of innovation inputs and outputs than previously possible, the data allow generating measures of markups and efficiency (TFPQ) that correspond more closely to the concepts of rents and technological leadership envisaged in the Schumpeterian literature. Except for the 10% most productive plants, increased competition depresses most measures of innovation. Falling rents exacerbate declines among laggards, while rising rents further increase innovation among leaders.
Original languageAmerican English
Pages1
Number of pages23
StateIn preparation - 2021

Fingerprint

Dive into the research topics of 'Proximity to the Frontier, Markups, and the Response of Innovation to Foreign Competition: Evidence from Matched Production-Innovation Surveys in Chile'. Together they form a unique fingerprint.

Cite this