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What Is Absorptive Capacity? Why Do Firms That Fall Behind

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Essay

What is absorptive capacity? Why do firms that fall behind the technology frontier find it difficult to catch up?


Definitions:

Quota Rights

Entitlements allocated by governments or international bodies that allow entities to import or export a specified quantity of goods.

Tariff Revenue

Income that a government earns from imposing taxes on imported goods.

United States

A country located in North America, known for its significant economic, political, and cultural influence worldwide.

Tariff

A tax imposed by a government on goods and services imported from other countries.

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