Innovations are rightly recognized as the engines of economic growth, but the distinction between process (cost-reducing) innovation and product (qualityimproving) innovation is not thoroughly explored especially in the theory of international trade. This paper compares positive and normative implications of process and product innovations in a simple two-country model ０ｆinternational trade. The effects of cost-reducing and quality-improving innovations on the terms of trade and economic welfare are revealed almost diametrically opposite.　Ａ cost-reducing innovation in ａ country's export industry may give rise to a self-damaging "immiserising growth," whereas ａ quality-improving innovation in the same industry may lead to ａ beggar my-neighbor "inverse immiserising growth." We will elucidate and interpret the exact conditions for these paradoxes to materialize.