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Can Social Norms Affect the International Allocation of Innovation?

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  • Guido Cozzi

Abstract

If economic agents coordinate on social norms more oriented towards the protection of national industries, an asymmetric international specialization in the research and development (R&D) arises even in a tariff free world with no a priori differences across countries in endowments, demography or technology. This paper exploits the indifference in the composition of R&D expenditure across sectors of the typical multi-sector Schumpeterian framework (forward-looking decisions, CRS R&D technology and free entry) to construct a theory of the international allocation of innovation and education based on sunspot equilibrium. A role for industrial policies as mere coordination devices emerges in an international Schumpeterian framework. The implications for the relationships between inequality and growth are examined.

Suggested Citation

  • Guido Cozzi, "undated". "Can Social Norms Affect the International Allocation of Innovation?," Working Papers 2008_02, Business School - Economics, University of Glasgow.
    • Handle: RePEc:gla:glaewp:2008_02
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    File URL: http://www.gla.ac.uk/media/media_61073_en.pdf
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    References listed on IDEAS

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    Cited by:

    1. Giammario Impullitti, 2006. "International Competition, Growth and Optimal R&D Subsidies," 2006 Meeting Papers 739, Society for Economic Dynamics.
    2. Guido Cozzi & Giammario Impullitti, 2010. "Government Spending Composition, Technical Change, and Wage Inequality," Journal of the European Economic Association, MIT Press, vol. 8(6), pages 1325-1358, December.

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    More about this item

    Keywords

    Schumpeterian Growth Theory; Inequality; International Trade; Social Norms; Indeterminacy; Sunspots.;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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