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Spillovers and the competitive pressure for long-run innovation

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  • Reis, Ana Balcão
  • Traca, Daniel A.

Abstract

This paper discusses the impact of oligopolistic product markets for innovation and growth, highlighting a novel, fundamental role of spillovers. We develop a model of endogenous growth with non-tournament R&D, where spillovers raise the relative R&D efficiency of laggards. A key feature is that the rate of innovation and the market configuration (i.e. the distribution of market shares) are jointly determined. Our results emphasize the role of spillovers in sustaining the competitive pressure that is fundamental for long-run innovation and economic growth.

Suggested Citation

  • Reis, Ana Balcão & Traca, Daniel A., 2008. "Spillovers and the competitive pressure for long-run innovation," European Economic Review, Elsevier, vol. 52(4), pages 589-610, May.
    • Handle: RePEc:eee:eecrev:v:52:y:2008:i:4:p:589-610
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    Cited by:

    1. Tom-Reiel Heggedal, 2008. "On R&D and the undersupply of emerging versus mature technologies," Discussion Papers 571, Statistics Norway, Research Department.
    2. S. Luckraz, 2008. "Process Spillovers and Growth," Journal of Optimization Theory and Applications, Springer, vol. 139(2), pages 315-335, November.
    3. Gil, Pedro Mazeda, 2010. "Stylised facts and other empirical evidence on firm dynamics, business cycle and growth," Research in Economics, Elsevier, vol. 64(2), pages 73-80, June.
    4. Claude D'Aspremont & Rodolphe Dos Santos Ferreira & Louis‐André Gérard‐Varet, 2010. "Strategic R&D investment, competitive toughness and growth," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(3), pages 273-295, September.

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