A Two-countries Two-R&D-sectors Model of Growth and Trade

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A Two-countries Two-R&D-sectors Model of Growth and Trade

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Gilles Koléda

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Gilles Koléda

Abstract

This paper presents a two-countries dynamic model of Schumpeterian growth with two innovative R&D sectors in each country: a vertical R&D sector that improves the quality of existing differentiated products and a horizontal R&D sector that creates new differentiated products. The two countries exchange differentiated products and beneficiate from knowledge spillovers, possibly from the other country. We opt for an endogenous growth without scale effect specification à la Howitt (1999) and explore the consequence on home research and production of an increase of research capacities in foreign country (possibly impulsed by R&D subsidies).

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Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c012_009.

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Length: 22 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:deg:conpap:c012_009

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Find related papers by JEL classification:
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2007-08-27 (All new papers)
NEP-INO-2007-08-27 (Innovation)
NEP-INT-2007-08-27 (International Trade)
NEP-KNM-2007-08-27 (Knowledge Management & Knowledge Economy)
NEP-MIC-2007-08-27 (Microeconomics)

References listed on IDEAS
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Paul Segerstrom & Elias Dinopoulos, 2004. "A Theory of North-South Trade and Globalization," 2004 Meeting Papers 30, Society for Economic Dynamics. [Downloadable!]
Other versions:
- Dinopoulos, Elias & Segerstrom, Paul, 2003. "A Theory of North-South Trade and Globalization," CEPR Discussion Papers 4140, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Dinopoulos, Elias & Thompson, Peter, 1998. " Schumpeterian Growth without Scale Effects," Journal of Economic Growth, Springer, vol. 3(4), pages 313-35, December. [Downloadable!] (restricted)

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