Trade and Innovation: Literature Review and Indicative Policies

This article analyzes the relationship between trade, innovation, and economic growth, exploring why some Central American countries have not achieved the expected growth despite implementing trade liberalization policies. It examines market failures related to knowledge diffusion and economies of scale that hinder the materialization of trade gains. It proposes microeconomic policies compatible with the concept of comparative advantage to promote innovation and the discovery of new economic activities. It highlights the importance of public-private cooperation and the role of academia in resolving these externalities.