Hideki Yamawaki, David A. Audretsch, Import Share under International Oligopoly with Differentiated Products: Japanese Imports in U.S. Manufacturing, The Review of Economics and Statistics, Vol. 70, No. 4 (Nov., 1988), pp. 569-579

[We present a model suggesting that innovative output is influenced by R&D and market structure characteristics. Based on a new and direct measure of innovation, we find that (1) the total number of innovations is negatively related to concentration and unionization, and positively related to R&D, skilled labor, and the degree to which large firms comprise the industry; and (2) these determinants have disparate effects on large and small firms.]

The authors examine how the strategic aspect of Japanese research and development expenditures and industrial policies affected U.S.-Japanese bilateral trade during the late 1970s, and investigate which component of R&D--expenditures on process innovation, product quality improvements, new products and new technology, or technology transfer--proved to be most effective. They find that while Japanese R&D expenditures have generally promoted Japan's trade advantage, certain components of R&D have proved more effective than other. The depreciation subsidy and special status with the Ministry of International Trade and Industry is positively related to the Japanese trade performance, while legal cartelization status has not had any apparent effect. Copyright 1988 by MIT Press.