Growth through heterogeneous innovations

Ufuk Akcigit and William Kerr

No 28/2013, Bank of Finland Research Discussion Papers from Bank of Finland

Abstract: We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multi-product firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects.

Keywords: Endogenous Growth; Innovation; Exploration; Exploitation; Research and Development; Patents; Citations; Scientists; Entrepreneurs (search for similar items in EconPapers)
JEL-codes: L16 O31 O33 O41 (search for similar items in EconPapers)
Date: 2013
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Related works:
Journal Article: Growth through Heterogeneous Innovations (2018)
Working Paper: Growth through Heterogeneous Innovations (2016)
Working Paper: Growth Through Heterogeneous Innovations (2012)
Working Paper: Growth Through Heterogeneous Innovations (2010)
Working Paper: Growth through Heterogeneous Innovations (2010)
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