Innovation and international trade in technology

Daniel F. Spulber*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

42 Scopus citations


The international market for technology is growing rapidly relative to world GDP. To study the international technology market, I present a model of innovation and international trade in which inventors auction their technology in both domestic and foreign markets. There is monopolistic competition in differentiated products. International trade in technology has number of significant economic effects. Technology trade improves the quality of innovation by increasing the pool of R&D experiments from which the best technology is chosen. Technology trade increases the efficiency of invention while at the same time lowering the total number of inventors relative to the equilibrium without technology trade. Technology trade increases the volume of trade in goods. Technology trade increases product variety at the market equilibrium. Technology trade increases national income in each country and increases total gains from trade.

Original languageEnglish (US)
Pages (from-to)1-20
Number of pages20
JournalJournal of Economic Theory
Issue number1
StatePublished - Jan 2008


  • Auctions
  • Gains from trade
  • International trade
  • Invention
  • Inventors
  • Licenses
  • R&D
  • Technology

ASJC Scopus subject areas

  • Economics and Econometrics


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