Wake Up and Smell the Ginseng: International Trade and the Rise of Incremental Innovation in Low-Wage Countries
Wake Up and Smell the Ginseng: International Trade and the Rise of Incremental Innovation in Low-Wage Countries
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DOI:
10.2139/ssrn.964158
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发表时间:
2007-01
期刊:
影响因子:
--
通讯作者:
Diego Puga;Daniel Trefler
中科院分区:
文献类型:
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作者:
Diego Puga;Daniel Trefler
Increasingly, a small number of low-wage countries such as China, India and Mexico are involved in incremental innovation. That is, they are responsible for resolving production-line bugs and suggesting product improvements. We provide evidence of this new phenomenon and develop a model in which there is a transition from old-style product-cycle trade to trade involving incremental innovation in low-wage countries. The model explains why levels of involvement in incremental innovation vary across low-wage countries and across firms within each low-wage country. We draw out implications for sectoral earnings, living standards, the capital account and, foremost, international trade in goods.