American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
A Theory of Defensive Skill-Biased Innovation and Globalization
American Economic Review
vol. 93,
no. 3, June 2003
(pp. 709–728)
Abstract
This paper considers a dynamic model of innovations in which firms can endogenously bias the direction of technological change. Both in a North-North and North-South context, we show that, when globalization triggers an increased threat of technological leapfrogging or imitation, firms tend to respond to that threat by biasing the direction of their innovations towards skilled-labor-intensive technologies. We show that this process of defensive skill-biased innovations generates an increase in wage inequalities in both regions. We then discuss suggestive empirical evidence of the existence of defensive skill-biased technical change.Citation
Thoenig, Mathias, and Thierry Verdier. 2003. "A Theory of Defensive Skill-Biased Innovation and Globalization ." American Economic Review, 93 (3): 709–728. DOI: 10.1257/000282803322157052JEL Classification
- F16 Trade and Labor Market Interactions
- O33 Technological Change: Choices and Consequences; Diffusion Processes
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation