Growth leaders

Federico Etro ()

Journal of Macroeconomics, 2008, vol. 30, issue 3, 1148-1172

Abstract: This article presents a Schumpeterian model where the engine of growth is in the microeconomic structure of the patent races. Under decreasing marginal productivity and endogenous entry in the R&D sector, the equilibrium is characterized by small firms investing too little and the growth process is dynamically inefficient; the optimal policy for innovation always implies R&D subsidies. When the incumbent monopolists are leaders in patent races with endogenous entry, they engage in larger R&D investment and their persistent leadership enhances growth. In a multicountry setup, growth is driven by innovations in the largest country and increases with its relative size and openness. Finally, I derive the optimal R&D subsidy from the point of view of a single country, and provide a new case for international coordination of R&D policies.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0164-0704(07)00081-X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:30:y:2008:i:3:p:1148-1172

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().