Knowledge Diffusion, Trade, and Innovation across Countries and Sectors

Jie Cai, Nan Li, Ana María Santacreu · 2021 · American Economic Journal Macroeconomics

Summary. This paper develops a framework showing how trade, innovation, and knowledge diffusion interact across countries and sectors. Using an economic model calibrated to real-world data, the authors find that reducing trade costs shifts research and development investment between sectors and changes comparative advantage. Knowledge diffusion varies across sectors and amplifies these specialization effects, creating significant welfare gains.

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@article{cai-2021-knowledge-diffusion-trade-innovation-across,
  title   = {Knowledge Diffusion, Trade, and Innovation across Countries and Sectors},
  author  = {Jie Cai and Nan Li and Ana María Santacreu},
  journal = {American Economic Journal Macroeconomics},
  year    = {2021},
  doi     = {10.1257/mac.20200084},
  url     = {https://doi.org/10.1257/mac.20200084}
}

TY  - JOUR
TI  - Knowledge Diffusion, Trade, and Innovation across Countries and Sectors
AU  - Jie Cai
AU  - Nan Li
AU  - Ana María Santacreu
JO  - American Economic Journal Macroeconomics
PY  - 2021
DO  - 10.1257/mac.20200084
UR  - https://doi.org/10.1257/mac.20200084
ER  - 

Details

DOI

10.1257/mac.20200084

Countries

China, United States

Regions

Asia, North America

Categories

innovation-theory, regional-innovation-systems, general-innovation

Added

2026-04-28