Proximity to the Frontier, Markups, and the Response of Innovation to Foreign Competition : Evidence from Matched Production-Innovation Surveys in Chile
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 o...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/356601629742092693/Proximity-to-the-Frontier-Markups-and-the-Response-of-Innovation-to-Foreign-Competition-Evidence-from-Matched-Production-Innovation-Surveys-in-Chile http://hdl.handle.net/10986/36198 |
| Summary: | 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 (physical total factor productivity) that
correspond more closely to the concepts of rents and
technological leadership envisaged in the Schumpeterian
literature. Except for the 10 percent most productive
plants, increased competition depresses most measures of
innovation. Falling rents exacerbate declines among
laggards, while rising rents further increase innovation
among leaders. |
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