We revisit the relation between product market competition and leading-edge growth in a model where horizontal and vertical innovations simultaneously occur. We show that competition exerts an important effect on the composition of aggregate R&D (vertical versus horizontal). In fact, when product market competition gets more intense, a larger fraction of R&D is engaged in improving the quality of products; this occurs at the expense of a lower rate of horizontal innovation. This effect, which is absent in the basic endogenous growth model with only vertical innovations, may overturn the inverse relation between product market competition and leading-edge growth found in prior theoretical models.

A. Minniti (2010). Product market competition, R&D composition and growth. ECONOMIC MODELLING, 27, 417-421 [10.1016/j.econmod.2009.10.008].

Product market competition, R&D composition and growth

MINNITI, ANTONIO
2010

Abstract

We revisit the relation between product market competition and leading-edge growth in a model where horizontal and vertical innovations simultaneously occur. We show that competition exerts an important effect on the composition of aggregate R&D (vertical versus horizontal). In fact, when product market competition gets more intense, a larger fraction of R&D is engaged in improving the quality of products; this occurs at the expense of a lower rate of horizontal innovation. This effect, which is absent in the basic endogenous growth model with only vertical innovations, may overturn the inverse relation between product market competition and leading-edge growth found in prior theoretical models.
2010
A. Minniti (2010). Product market competition, R&D composition and growth. ECONOMIC MODELLING, 27, 417-421 [10.1016/j.econmod.2009.10.008].
A. Minniti
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/86876
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