Economic Integration, Process and Product Innovation, and Relative Skill Demand

10 Pages Posted: 3 Nov 2008

See all articles by Sebastian Braun

Sebastian Braun

Kiel Institute for the World Economy - IFW

Abstract

The interaction between economic integration, product and process innovation, and relative skill demand is analyzed in a model of international oligopoly. Lower trading barriers increase the degree of foreign competition. The competing enterprises respond by investing more aggressively in lowering marginal costs of production. Moreover, firms reduce the substitutability of their products through additional investment in product innovation. The paper also shows that the relative demand for skilled workers may increase as a result.

Suggested Citation

Braun, Sebastian Till, Economic Integration, Process and Product Innovation, and Relative Skill Demand. Review of International Economics, Vol. 16, Issue 5, pp. 864-873, November 2008. Available at SSRN: https://ssrn.com/abstract=1292033 or http://dx.doi.org/10.1111/j.1467-9396.2008.00754.x

Sebastian Till Braun (Contact Author)

Kiel Institute for the World Economy - IFW ( email )

United States

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