Innovation, Knowledge Diffusion, and Globalization

42 Pages Posted: 24 Sep 2018 Last revised: 2 Jan 2025

See all articles by Nelson Lind

Nelson Lind

University of California, San Diego (UCSD)

Natalia Ramondo

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS)

Date Written: September 2018

Abstract

We review a recent body of theoretical literature that links the creation and diffusion of knowledge and technology to openness. We analyze two channels through which the spread of new ideas occurs: international trade and the activity of multinational firms (multinational production). The unifying theme of our survey is methodological. We focus on quantitative general equilibrium models that treat productivities as Fréchet random variables—as in the model of trade in Eaton and Kortum (2002) (EK). We present models in the literature that extend the EK model of trade to innovation, diffusion, and multinational firms, and examine the implications for counterfactuals related to the gains from trade. We finalize with new directions for research.

Suggested Citation

Lind, Nelson and Ramondo, Natalia, Innovation, Knowledge Diffusion, and Globalization (September 2018). NBER Working Paper No. w25071, Available at SSRN: https://ssrn.com/abstract=3254046

Nelson Lind (Contact Author)

University of California, San Diego (UCSD) ( email )

Natalia Ramondo

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS) ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

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