Competition and growth in endogenous growth model with expanding product variety without scale effects
AbstractThe aim of this paper is to analyse the relationship between competition and growth in an endogenous growth model with expanding product variety without scale effect. In order to do this, we develop an extension of the Bucci (2005) model in which we eliminate the scale effects. We find that the relationship between competition and growth is always inverted U shaped. We explain this result by the composition of two effects on growth: resource allocation and profit incentive effects. For low values of product market competition, an increase of competition has a positive effect on growth. For large values of competition, we have a negative relationship between competition and growth.
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Bibliographic InfoArticle provided by ULB -- Universite Libre de Bruxelles in its journal Brussels economic review.
Volume (Year): 49 (2006)
Issue (Month): 3 ()
Endogenous Growth; Horizontal Differentiation; Technological Change; Imperfect Competition;
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- Dominique Bianco, 2009.
"Growth And Competition In A Model Of Human Capital Accumulation And Research,"
Journal of Applied Economic Sciences,
Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(3(9)_Fall).
- Bianco, Dominique, 2008. "Growth and Competition in a Model of Human Capital Accumulation and Research," MPRA Paper 10913, University Library of Munich, Germany.
- Wang, Vey & Lai, Chung-Hui, 2011. "Franchise fee, competition and economic growth," Economic Modelling, Elsevier, vol. 28(5), pages 2090-2099, September.
- Dominique Bianco, 2007.
"An Inverted U-Relationship between Product Market Competition and Growth in an Extended Romerian Model: A Comment,"
Rivista di Politica Economica,
SIPI Spa, vol. 97(5), pages 245-258, September.
- Bianco, Dominique, 2007. "An inverted-U relationship between product market competition and Growth in an extended romerian model : A comment," MPRA Paper 4492, University Library of Munich, Germany.
- Bianco, Dominique, 2009.
"Competition and Growth in an Endogenous Growth Model with Expanding product Variety without Scale Effects Revisited,"
16670, University Library of Munich, Germany.
- Dominique BIANCO, 2009. "Competiton And Growth In An Endogenous Growth Model With Expanding Product Variety Without Scale Effects Revisited," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(4(10)_Win), pages 502-508.
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