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Scale Effects, Relative Supply of Skills, Industrial Structure and Endogenous Growth

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  • Pedro Mazeda Gil
  • Oscar Afonso
  • Paulo Brito

Abstract

This paper develops an endogenous directed technical change model that is consistent with the data on the distribution of firms and production across high- and low-tech sectors, and its relationship to economic growth, in a number of developed countries. We argue that scale effects at the industry level and the cross-country differences in the relative supply of skills induce the observed pattern in the industrial structure. We show, through calibration, that the predicted values for the number of firms, production, firm size and the economic growth rate closely match the relationship with the relative supply of skills observed in the data.

Suggested Citation

  • Pedro Mazeda Gil & Oscar Afonso & Paulo Brito, 2012. "Scale Effects, Relative Supply of Skills, Industrial Structure and Endogenous Growth," DEGIT Conference Papers c017_028, DEGIT, Dynamics, Economic Growth, and International Trade.
    • Handle: RePEc:deg:conpap:c017_028
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    File URL: http://degit.sam.sdu.dk/papers/degit_17/C017_028.pdf
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    References listed on IDEAS

    as
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