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Better, Faster, Stronger: Global Innovation and Trade Liberalization

Federica Coelli¹; Andreas Moxnes²; Karen Helene Ulltveit-Moe²

¹ University of Zurich · ² University of Oslo and CEPR

This paper estimates the effect on innovation of increased market access facilitated by trade liberalization. We use a novel empirical design that exploits tariff cuts during the 1990s, along with detailed data on innovation among firms from 65 countries. Our results reveal a large effect of tariff cuts on innovation as measured by patent data, suggesting that multilateral liberalization has promoted innovation and growth. These effects are not driven by the deterioration of innovation quality, and the results are robust to controlling for changes in the patent system and to industry-wide trends in innovation.

DOI

10.1162/rest_a_00951

Volume

104 (2)

Pages

205-216

Language

en

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