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Technological Distance, Growth And Scale Effects

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Author Info
Pietro Peretto (Duke University)
Sjak Smulders (Tilburg University)

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Abstract

We present an endogenous growth model in which the scale effect may be positive or negative, but vanishes asymptotically. The mechanism behind this result provides a microfoundation for models that exploit the interaction of growth and market structure to remove the scale effect. When more firms are active, the economy is more specialised in that firms are less likely to work on related problems. This increase in technological distance reduces the spillovers between firms. A larger economy with more firms accumulates more knowledge. However, the spillovers that benefit a firm do not necessarily increase because of the differentiation of the knowledge stock. Copyright 2002 Royal Economic Society

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 112 (2002)
Issue (Month): 481 (July)
Pages: 603-624
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Handle: RePEc:ecj:econjl:v:112:y:2002:i:481:p:603-624

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. R. Cowan & N. Jonard & J.-B. Zimmermann, 2006. "Evolving networks of inventors," Journal of Evolutionary Economics, Springer, vol. 16(1), pages 155-174, April. [Downloadable!] (restricted)
    Other versions:
  2. repec:bep:glecon:6:2007:4:4 is not listed on IDEAS
  3. Pedro Rui Mazeda Gil & Paulo Brito & Óscar Afonso, 2008. "A Model of Quality Ladders with Horizontal Entry," FEP Working Papers 296, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  4. Bas Straathof, 2006. "Schooling inequality and the rise of research," CPB Discussion Papers 74, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
    Other versions:
  5. Ang, James & Madsen, Jakob, 2009. "Can Second-Generation Endogenous Growth Models Explain The Productivity Trends and Knowledge Production In the Asian Miracle Economies?," MPRA Paper 17543, University Library of Munich, Germany. [Downloadable!]
  6. Ang, James, 2009. "Financial Reforms, Patent Protection and Knowledge Accumulation in India," MPRA Paper 17656, University Library of Munich, Germany. [Downloadable!]
  7. Nevin Cavusoglu & Edinaldo Tebaldi, 2006. "Evaluating growth theories and their empirical support: An assessment of the convergence hypothesis," Journal of Economic Methodology, Taylor and Francis Journals, vol. 13(1), pages 49-75, March. [Downloadable!] (restricted)
  8. Cowan,Robin & Jonard,Nicolas & Zimmermann,J-B, 2004. "Networks as Emergent Structures from Bilateral Collaboration," Research Memoranda 017, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  9. Piotr Stryszowski, 2005. "Intellectual Property Rights and National R&D Subsidy Policies in a Two-Country Schumpeterian Framework," DEGIT Conference Papers c010_027, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  10. Christian Groth, 2004. "Innovation and growth: What have we learnt from the robustness debate?," Discussion Papers 04-29, University of Copenhagen. Department of Economics, revised Nov 2004. [Downloadable!]
  11. Christian Ghiglino, 2007. "Random walk to innovation: why productivity follows a power law," Economics Discussion Papers 627, University of Essex, Department of Economics. [Downloadable!]
  12. Cowan,Robin & Jonard,Nicolas, 2004. "Information Technology and the Dynamics of Joint Innovation," Research Memoranda 014, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  13. Tom-Reiel Heggedal, 2008. "On R&D and the undersupply of emerging versus mature technologies," Discussion Papers 571, Research Department of Statistics Norway. [Downloadable!]
  14. Valerio Crispolti & Daniela Marconi, 2005. "Technology transfer and economic growth in developing countries: an econometric analysis," Temi di discussione (Economic working papers) 564, Bank of Italy, Economic Research Department. [Downloadable!]
  15. Attar, Mustafa A., 2008. "Science in the Third Dimension of R&D," MPRA Paper 9427, University Library of Munich, Germany. [Downloadable!]
  16. Carl-Johan Dalgaard & Martin Kaae Jensen, 2007. "Life Cycle Savings, Bequest, and the Diminishing Impact of Scale on Growth," Discussion Papers 07-17, University of Copenhagen. Department of Economics. [Downloadable!]
  17. Jakob B. Madsen, . "The Anatomy of Growth in the OECD since 1870: the Transformation from the Post-Malthusian Growth Regime to the Modern Growth Epoch," Monash Economics Working Papers 2009-14, Monash University, Department of Economics. [Downloadable!]
  18. Taiji Harashima, 2004. "A New Asymptotically Non-Scale Endogenous Growth Model," Development and Comp Systems 0412009, EconWPA, revised 20 Dec 2004. [Downloadable!]
  19. Pietro Peretto & Michelle Connolly, 2007. "The Manhattan Metaphor," Journal of Economic Growth, Springer, vol. 12(4), pages 329-350, December. [Downloadable!] (restricted)
  20. Christopher A. Laincz & Pietro F. Peretto, 2004. "Scale Effects, An Error of Aggregation Not Specification: Empirical Evidence," DEGIT Conference Papers c009_037, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
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