NBER Working Papers by Ram Acharya

Economists emphasize two channels through which import liberalization affects productivity, one operating between and the other within firms. According to the former, import competition triggers market share reallocations between domestic firms with different technological capabilities (selection). At the same time, imports can also improve firms' technologies through learning externalities (spillovers). We present evidence for a sample of industrialized countries over the period 1973 to 2002. First, in the long run, import liberalization lowers productivity in domestic industries through selection. This finding confirms the prediction of models with firm heterogeneity, including Melitz and Ottaviano (2008), in which unilateral liberalization lowers the profits of domestic relative to fore...

While there is general agreement that technology differences must figure prominently in any successful account of the cross-country income variation, not much is known on the source of these technology differences. This paper examines cross-country income differences in terms of factor accumulation, domestic R&D, and foreign technological spillovers. The empirical analysis encompasses seventeen industrialized countries in four continents over three decades, at a level disaggregated enough to identify innovations in a number of key high-tech sectors. International technology transfer is found to play a crucial part in accounting for income differences. We also relate technology transfer to imports, showing that imports are often a major channel. At the same time, our analysis highlights tha...