Dear colleagues,

The Department of Economics cordially invite you to an ad-hoc WU Economic Research Seminar on June 17, with

Ron Davies

(University College Dublin)

on

"Innovation and the Technological Content of Imports"

(joint with Igor Bagayev and Dieter F. Kogler)

Abstract: There is a long-standing belief that exposure to innovation in other countries affects innovation at home. This exposure happens, among other ways, via importing. Three mechanisms are discussed: import competition (which, as the market shrinks, theoretically has an ambiguous effect), importing of inputs (which, by lowering costs, encourages innovation), and diffusion (exposure to new ideas which spurs new innovation). To date, the empirical literature has been forced to focus on the product level which hinders the ability to separate these three channels because it does not speak to the technology content of the imports. When technologies embodied in one product affect innovation in another, such as via diffusion, this misses a key facet of the spread of innovation. By using a new mapping between products and technologies, we are able to shift the analysis to the technology class level, permitting us to separate out these three channels. Using global data on trade and patents over a 35 year period, we find robust evidence for diffusion across countries and time. When controlling for diffusion, import competition switches from a positive effect to a negative one and imported inputs become insignificant, suggesting potential biases in the existing literature. Among other things, this suggests that while protection in a given product may have positive effects for innovation in that industry, it can have simultaneous negative effects in others.

Time and place: Monday, June 17, 4.30 pm – 6 pm, Campus WU, Welthandelsplatz 1, 1020 Vienna, building D4, entrance A, ground floor, room 0.019

With best regards,

Harald Oberhofer

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Univ.-Prof. Dr. Harald Oberhofer

Institute for International Economics

WU Vienna University of Economics and Business

Phone: +43/1/31336-4984

Fax: +43/1/31336-4984

Email: harald.oberhofer@wu.ac.at

Webpage: https://www.wu.ac.at/ie/mitarbeiter/harald-oberhofer/

Austrian Institute of Economic Research (WIFO)

Phone: +43/1/7982601-468

Fax: +43/1/7989386

Email: harald.oberhofer@wifo.ac.at

Webpage: http://www.wifo.ac.at/harald_oberhofer