This thesis consists of three individual studies and a common introduction. Albeit distinct and self-contained, all studies are devoted to how and why trade flows adjust according to characteristics of markets and attributes of links between markets. The studies build on the idea that questions related to how and why different characteristics of markets and links affect trade flows are inseparable from questions pertaining to which components of trade flows they alter.

The first study adheres to the export decision of individual firms and focuses on the role of product variety for firms’ exports from a two-pronged perspective: (i) as an attribute of firms that pertains to their potential to recover destination-specific fixed costs of entry and thus the geographical scope of their export activities and (ii) as a component of firms’ export flows that adjusts across destination markets. The second study is devoted to an analysis of how the magnitude of the fixed entry costs firms incur by entering foreign markets is related to characteristics of the link between the origin and the destination market. It proposes a coupling between familiarity and the size of fixed entry costs, such that familiarity should primarily affect trade flows by affecting the number of exporting firms (the extensive margin). The third study analyzes the relationship between technology specialization and export specialization across regions and how the correspondence between the technology specialization in origin and destination alters the quality of the commodities being traded. A gravity model is augmented with technology specialization variables (based on citation-weighed patent data) and their effect on aggregate export values and prices is estimated.

This paper analyzes how different R&D strategies of incumbent firms affect the quantity and quality of their entrepreneurial spawning. When examining entrepreneurial ventures of ex-employees of firms with different R&D strategies, three things emerge: First, firms with persistent R&D investments and a general superiority in sales, exports, productivity, profitability and wages are less likely to generate entrepreneurs than firms with temporary or no R&D investments. Second, start-ups from knowledge intensive business service (RIBS) firms with persistent R&D investments have a significantly increased probability of survival. No corresponding association between the R&D strategies of incumbents and survival of entrepreneurial spawns is found for incumbents in manufacturing sectors. Third, spin-outs from KIBS-firms are more likely to survive if they start in the same sector, indicating the importance of inherited knowledge. These findings suggest that R&D intensive firms are less likely to generate employee start-ups, but their entrepreneurial spawns tend to be of higher quality.

We examine the role of regional import flows for renewal of regional industries. The hypothesis is that imports stimulate renewal of local industries by being vehicles for technology diffusion and means by which local firms can exploit advantages of global specialisation. We find robust and positive relationships between high-quality imports and renewal of regional exports, where the latter are measured by the introduction of novel export products of local firms. Connectedness to international markets via import networks appears to be a stimulus for the renewal of regional exports. 

Ingress: Åtgärderna för att hålla uppe efterfrågan med sänkta räntor och beredskapen att vidta finanspolitiska åtgärder är föredömliga. Men de aviserade krispaketen löser inte det som kan beskrivas som en efterfrågekollaps, skriver tre nationalekonomer och föreslår kort- och långsiktiga lösningar samt en reformkommission.

Ingress: Åtgärder som fungerade under 1990-talskrisen och finanskrisen har inte samma verkningskraft i dag. Räntekostnader bör nu sättas till noll där det är möjligt och ett tillfälligt moratorium införas vad gäller företagens amorteringar och räntor, skriver tre nationalekonomer.

This year Swedish Economic Forum Report examines industrial policy. Over the 20th century industrial policy has been used for promoting economic development in both advanced industrialized countries as well as in developing countries. However, there is no real consensus as to what industrial policy encompasses orhow effective it is for achieving economic development. In recent years, geopolitical and geoeconomic considerations have spurred a renewed interest and advocacy for the use of industrial policy.

In the report we assess this new interest for industrial policy from a Swedish and international perspective. The various chapters in the report describes experiences and impacts of conducting industrial policies in Sweden, UK, Germany, and China. The chapters address different theoretical and empirical perspectives of industrial policies.

This paper studies the innovative performance of 130 Swedish corporations during 1993-1994. The number of patents per corporation is explained as a function of the accessibility to internal and external knowledge sources of each corporation. A coherent way of handling accessibility measures, within and between corporations located across regions, is introduced. We examine the relative importance of intra- and interregional knowledge sources from 1) the own corporation, 2) other corporations, and 3) universities. The results show that there is a positive relationship between the innovativeness of a corporation and its accessibility to university researchers within regions where own research groups are located. Good accessibility among the corporation's research units does not have any significant effects on the likelihood of generation of patents. Instead the size of the R&D staff of the corporation seems to be the most important internal factor. There is no indication that intraregional accessibility to other corporations' research is important for a corporation's innovativeness. However, there is some indication of reduced likelihood for own corporate patenting when other corporate R&D is located in nearby regions. This may reflect a negative effect from competition for R&D labor.

This paper develops a framework of innovation dynamics to appreciate observed heterogeneity of firm size distributions, in which dynamics refer to exit and entry of product varieties and variety markets of individual firms. The analysis is based on a model of variety-triplets where every such triplet in the economy is identified by a unique combination of a variety, destination and firm. New variety triplets are introduced by innovating firms in a quasi-temporal setting of monopolistic competition. Ideas for variety-triplets arrive to firms according to a firm-specific and state dependent Poisson process, whereas variety triplets exit according to a destination-specific Poisson process. The empirical analysis employs a detailed firm-level data base which provides information about all variety triplets. Firm size is measured by a firm’s number of variety triplets. The empirical results are compatible with the model predictions of (i) a persistent distribution of firm sizes, (ii) frequent events of exit and entry, and (iii) state dependent entry, where a state may be given by each firm’s composition of triplets and/or other firm attributes.