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Competition, R&D Activities and Endogenous Growth

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  • Antonio, MINNITI

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))

Abstract

A prediction of the endogenous growth models with quality ladders is that there exists a negative relation between growth and the degree of market competition. The aim of this article is to shed light on the relation between competition and growth when horizontal and vertical innovations can simultaneously occur by adopting the structure of the patent race model; we show the way in which the toughness of competition influences the firms’ incentives to invest in the two R&D activities; in particular, the presence of vertical and horizontal differentiation can determine a non monotonic long run relationship between competition and growth.

Suggested Citation

  • Antonio, MINNITI, 2003. "Competition, R&D Activities and Endogenous Growth," LIDAM Discussion Papers IRES 2004009, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2004009
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    References listed on IDEAS

    as
    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Jan Boone, 2000. "Competitive Pressure: The Effects on Investments in Product and Process Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 549-569, Autumn.
    3. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    4. Segerstrom, Paul S, 2000. "The Long-Run Growth Effects of R&D Subsidies," Journal of Economic Growth, Springer, vol. 5(3), pages 277-305, September.
    5. Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August.
    6. Boone, Jan, 2001. "Intensity of competition and the incentive to innovate," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 705-726, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Growth; Competition; Vertical and Horizontal Innovations;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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