Project Details
Projekt
Innovation and Technology
Subject Area
Economic Policy, Applied Economics
Economic Theory
Economic Theory
Term
since 2026
Project identifier
Deutsche Forschungsgemeinschaft (DFG) - Project number 550491480
The aim of this project is to explore the interplay between trade and innovation in open economies. We will focus on the crucial role that managers in global firms play in decisions regarding market entry and technology adoption, often treated as distinct aspects of profit maximisation in existing research. Additionally, we will examine the relationship between offshoring and technology adoption, analysing when they act as complements or substitutes in a firm's production process decisions. Our project will begin by documenting various sources of observed technology improvements, distinguishing labour reallocation, entry and exit, and technology adoption as key channels. Based on this evidence, we will conduct theoretical research on the importance of these channels, guiding further structural empirical research in later stages of the funding period. Furthermore, our project will illuminate the distributional effects of trade by analysing how foreign market entry and technology adoption interact to determine the distribution of economic rents across firms. In this context, we aim to provide a comprehensive perspective, highlighting the relative importance of labour reallocation within and between industries as well as the reallocation of labour across firms and occupations for overall income distribution. As part of the newly founded Research Unit IDoL, our research will benefit from significant synergies with other projects within the unit. Specifically, it will gain valuable insights from the "Global Value Chains", "Services", "Superstar Firms", and "Firm Organization" projects. Additionally, the "Infrastructure" project will provide crucial input by collecting new data on tariffs and non-tariff barriers and offering support in data management.
DFG Programme
Research Units
