We study how commodity booms affect productivity using administrative microdata from Chile that combine firm exports by products and destinations, employer-employee records, and firm-to-firm production networks. Exploiting differential Chinese demand for Chilean commodities, we construct firm-specific commodity price shocks. We find three micro-level mechanisms. First, more exposed firms experience larger revenue increases but no differential productivity gains, channeling revenues into wages and materials. Second, among exposed firms, low-productivity firms expand employment while high-productivity firms do not, hiring workers from more productive employers. Third, domestic suppliers with greater indirect exposure show larger increases in sales and productivity. We develop a model with heterogeneous export wedges and labor market frictions where commodity booms can reduce sectoral aggregate productivity by exacerbating input misallocation—consistent with both the firm-level and aggregate evidence. Calibrated to Chile, this mechanism explains half of the mining TFP decline from 2005 to 2013.

US multinationals formed joint ventures in China for market access and lower labor costs. However, these ventures transfer technology to Chinese firms, fueling future competition. While individual firms weigh the risks to their own profits, they disregard the negative impact on other US firms and the broader economy, resulting in an over-investment that may reduce the US welfare. In our empirical analysis, industries with more joint ventures in China show positive spillovers to Chinese firms but negative outcomes for firms in the US. We develop a two-country model with oligopolistic competition, innovation, and joint ventures. For the US, the short-run gains from joint ventures are outweighed by long-run losses due to rising Chinese competition. Joint ventures benefit large US firms at the expense of small firms and the real wages of workers. A ban on joint ventures since 1999 would have boosted US welfare by 1.2 percent.

We quantify the contribution of the largest firms to South Korea's economic performance since 1970. Using firm-level historical data, we document a novel fact: firm concentration rose substantially during the growth miracle period. To understand whether the increased importance of large firms contributed positively or negatively to the South Korean growth miracle, we build a quantitative heterogeneous firm small open economy model. Our framework accommodates a variety of causes and consequences of (changes in) firm concentration: productivity, distortions, selection into exporting, and oligopolistic and oligopsonistic market power in domestic goods and labor markets. The model is implemented directly on the firm-level data and inverted to recover the drivers of changing concentration. We find that most of the increased concentration is attributable to higher productivity growth of the largest firms. Shutting down differential productivity growth of the top 3 firms within each sector would have decreased firm concentration, but nonetheless would have reduced welfare by 2%. Differential distortions and foreign market access of the largest firms played a more limited role in the trends in concentration and had a smaller welfare impact. Thus, the largest Korean firms were superstars rather than supervillains.

When should policymakers transition from adoption-led to innovation-led growth? Using South Korea's historical technology-transfer data, we document three facts: firms benefit more from adoption when the technology gap is larger; sellers charge higher fees as the gap narrows; and adoption generates knowledge diffusion to non-adopters. We build a two-country growth model consistent with these facts. As the gap narrows, adoption's productivity gains diminish and adoption fees rise, eroding the effectiveness of adoption subsidies. Adoption's contribution to Korea's TFP growth falls from 31% to 3% while innovation's rises from 2% to 33% over 1973--2023. Korea's state-dependent shift from adoption to innovation subsidies improved welfare by 7.1%. Higher initial import tariffs can further improve welfare by inducing foreign sellers to charge lower fees.

This paper develops an occupation-level measure of Capital-Embodied Innovation (CEI) by matching patents with capital goods based on their text similarity. The impact of CEI on labor demand is heterogeneous, depending on the similarity between capital and occupational tasks. Specifically, CEI associated with task-similar capital reduces the relative labor demand, whereas CEI related to task-dissimilar capital raises it. Between 1980 and 2015, abstract and non-routine occupations experienced more innovations in task-dissimilar capital and fewer in task-similar capital. CEI can explain a significant fraction of the task-biased labor market changes and the decline in labor share.