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Growth, Inter‐Industry And Intra‐Industry Competition And Welfare

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  • ANTONIO MINNITI

Abstract

In this paper we introduce strategic interaction between firms in an R&D growth model which captures both the intra‐industry competition between firms operating within an industry and the inter‐industry competition between firms in different industries. We show that the more substitutable the goods produced within each industry (across industries) are, that is, the more intense the intra‐industry (inter‐industry) competition, the higher is the growth rate. In the comparison between social optimum and a decentralized economy, it is shown that the market outcome is characterized by inefficiently high entry of firms within each industry and insufficient productivity growth.

Suggested Citation

  • Antonio Minniti, 2009. "Growth, Inter‐Industry And Intra‐Industry Competition And Welfare," The Japanese Economic Review, Japanese Economic Association, vol. 60(1), pages 110-132, March.
    • Handle: RePEc:bla:jecrev:v:60:y:2009:i:1:p:110-132
    DOI: 10.1111/j.1468-5876.2008.00437.x
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    References listed on IDEAS

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    Cited by:

    1. Keishun Suzuki, 2020. "Competition, patent protection, and innovation with heterogeneous firms in an endogenous market structure," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 729-750, June.

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