IDEAS home Printed from https://ideas.repec.org/a/cup/macdyn/v17y2013i07p1438-1466_00.html
   My bibliography  Save this article

Growth And Firm Dynamics With Horizontal And Vertical R&D

Author

Listed:
  • Gil, Pedro Mazeda
  • Brito, Paulo
  • Afonso, Oscar

Abstract

A negative or nonsignificant empirical correlation between aggregate R&D intensity and the economic growth rate is a well-known fact in the empirical growth literature, but scarcely addressed in the theoretical growth literature. This paper develops an endogenous-growth~model that explores the interrelation~between horizontal and vertical R&D under a lab-equipment specification that is consistent with that stylized fact. A key feature is that the growth rate is fully endogenous both on the intensive and on the extensive margin. Strong composition effects between horizontal and vertical R&D, along both transition and the balanced-growth path, then emerge as the main mechanism producing those results. This setting also allows us to obtain a relationship between economic growth and firm dynamics that is consistent with the empirical facts.

Suggested Citation

  • Gil, Pedro Mazeda & Brito, Paulo & Afonso, Oscar, 2013. "Growth And Firm Dynamics With Horizontal And Vertical R&D," Macroeconomic Dynamics, Cambridge University Press, vol. 17(7), pages 1438-1466, October.
    • Handle: RePEc:cup:macdyn:v:17:y:2013:i:07:p:1438-1466_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1365100512000181/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pedro Mazeda Gil & André Almeida, & Sofia B.S.D. Castro,, 2015. "Flexible Transitional Dynamics in a Non-Scale Fully Endogenous Growth Model," CEF.UP Working Papers 1503, Universidade do Porto, Faculdade de Economia do Porto.
    2. Yi-Ling Cheng & Juin-Jen Chang, 2017. "The Quality of Intermediate Goods: Growth and Welfare Implications," The Economic Record, The Economic Society of Australia, vol. 93(302), pages 434-447, September.
    3. Sochirca, Elena & Gil, Pedro Mazeda & Afonso, Oscar, 2014. "Technology structure and skill structure: Costly investment and complementarity effects quantification," Journal of Macroeconomics, Elsevier, vol. 40(C), pages 172-189.
    4. Bucci, Alberto & Carbonari, Lorenzo & Gil, Pedro Mazeda & Trovato, Giovanni, 2021. "Economic growth and innovation complexity: An empirical estimation of a Hidden Markov Model," Economic Modelling, Elsevier, vol. 98(C), pages 86-99.
    5. Pedro Gil & Fernanda Figueiredo, 2013. "Firm size distribution under horizontal and vertical innovation," Journal of Evolutionary Economics, Springer, vol. 23(1), pages 129-161, January.
    6. Gil, Pedro Mazeda & Iglésias, Gustavo & Guimarães, Luís, 2023. "Endogenous growth and monetary policy: How do interest-rate feedback rules shape nominal and real transitional dynamics?," Journal of International Money and Finance, Elsevier, vol. 138(C).
    7. Pedro Mazeda Gil & Oscar Afonso & Paulo Brito, 2012. "Skill Structure and Technology Structure: Innovation and Growth Implications," FEP Working Papers 470, Universidade do Porto, Faculdade de Economia do Porto.
    8. Óscar Afonso & Ana Rita Longras, 2022. "Corruption, institutional quality, and offshoring: How do they affect comparative advantage, inter‐country wage inequality, and economic growth?," Metroeconomica, Wiley Blackwell, vol. 73(4), pages 987-1020, November.
    9. Oscar Afonso & Tiago Sequeira, 2023. "The Effect of Inflation on Wage Inequality: A North–South Monetary Model of Endogenous Growth with International Trade," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 55(1), pages 215-249, February.
    10. Pedro Gil, 2013. "Animal spirits and the composition of innovation in a lab-equipment R&D model with transition," Journal of Economics, Springer, vol. 108(1), pages 1-33, January.
    11. Pedro Mazeda Gil & Oscar Afonso & Paulo Brito, 2012. "Scale Effects, Relative Supply of Skills, Industrial Structure and Endogenous Growth," DEGIT Conference Papers c017_028, DEGIT, Dynamics, Economic Growth, and International Trade.
    12. Afonso, Óscar, 2016. "Effects of labour-market institutions on employment, wages, R&D intensity and growth in 27 OECD countries: From theory to practice," Economic Modelling, Elsevier, vol. 53(C), pages 48-62.
    13. He, Qichun & Wang, Xilin, 2020. "Money, Human Capital and Endogenous Market Structure in a Schumpeterian Economy," MPRA Paper 104609, University Library of Munich, Germany.
    14. Gil, Pedro Mazeda & Afonso, Oscar & Brito, Paulo, 2019. "Economic growth, the high-tech sector, and the high skilled: Theory and quantitative implications," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 89-105.
    15. Pedro Mazeda Gil & Oscar Afonso & Paulo B. Vasconcelos, 2015. "Skill-Structure Shocks, the Share of the High-Tech Sector and Economic Growth Dynamics," FEP Working Papers 554, Universidade do Porto, Faculdade de Economia do Porto.
    16. Pedro Mazeda Gil & Oscar Afonso & Paulo B. Vasconcelos, 2013. "Industry Dynamics and Aggregate Stability over Transition," FEP Working Papers 484, Universidade do Porto, Faculdade de Economia do Porto.

    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:macdyn:v:17:y:2013:i:07:p:1438-1466_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/mdy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.