Innovation vs. Imitation and the Evolution of Productivity Distributions

Michael Koenig (), Jan Lorenz () and Fabrizio Zilibotti
Additional contact information
Michael Koenig: Stanford University
Authors registered in the RePEc Author Service: Michael David König

No 11-008, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: We develop a tractable dynamic model of productivity growth and technology spillovers that is consistent with the emergence of real world empirical productivity distributions. Firms can improve productivity by engaging in in-house R&D, or alternatively, by trying to imitate other firms’ technologies subject to limits to their absorptive capacities. The outcome of both strategies is stochastic. The choice between in-house R&D and imitation is endogenous, and based on firms’ profit maximization motive. Firms closer to the technological frontier have less imitation opportunities, and tend to choose more often in-house R&D, consistent with the empirical evidence. The equilibrium choice leads to balanced growth featuring persistent productivity differences even when starting from ex-ante identical firms. The long run productivity distribution can be described as a traveling wave with tails following Zipf’s law as it can be observed in the empirical data. Idiosyncratic shocks to firms’ productivities of R&D

Keywords: innovation; growth; quality ladder; absorptive capacity; productivity di?erences; spillovers (search for similar items in EconPapers)
JEL-codes: E1 O40 (search for similar items in EconPapers)
Date: 2012-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

Downloads: (external link)
http://www-siepr.stanford.edu/repec/sip/11-008.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www-siepr.stanford.edu:80 (No such host is known. )

Related works:
Journal Article: Innovation vs. imitation and the evolution of productivity distributions (2016)
Working Paper: Innovation vs imitation and the evolution of productivity distributions (2012)
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:sip:dpaper:11-008

Access Statistics for this paper

More papers in Discussion Papers from Stanford Institute for Economic Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by Anne Shor ( this e-mail address is bad, please contact ).