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Competition and Growth: Reinterpreting their Relationship

Author

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  • Daria Onori

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, UCL IRES - Institut de recherches économiques et sociales - UCL - Université Catholique de Louvain = Catholic University of Louvain, Departement of Economics and Law, Faculty of Economics - UNIROMA - Università degli Studi di Roma "La Sapienza" = Sapienza University [Rome])

Abstract
In this paper we modify a standard quality ladder model by assuming that R&D is driven by outsider firms and the winners of the race sell licenses over their patents, instead of entering directly the intermediate good sector. As a reward they get the aggregate profit of the industry. Moreover, in the intermediate good sector firms compete à la Cournot and it is assumed that there are spillovers represented by strategic complementarities on costs. We prove that there exists an interval of values of the spillover parameter such that the relationship between competition and growth is an inverted-U-shape.

Suggested Citation

  • Daria Onori, 2013. "Competition and Growth: Reinterpreting their Relationship," Working Papers halshs-00806994, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00806994
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00806994
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    3. Raul V. Fabella, 2017. "Competition, Regulation and Institutional Quality," UP School of Economics Discussion Papers 201701, University of the Philippines School of Economics.

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    More about this item

    Keywords

    strategic complementarities; quality ladder; Cournot oligopoly; competition;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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