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Trade and innovation
Marc J. Melitz and Stephen J. Redding
July 2021
Paper No' :

Tags: innovation; trade; growth

International trade is a key determinant of firm profitability and survival, so it is natural to expect it to influence both incentives to innovate and the rate of creative destruction. This column highlights four key mechanisms through which international trade affects endogenous innovation and growth: market size, competition, comparative advantage, and knowledge spillovers.