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Technological-knowledge bias and the industrial structure under costly investment and complementarities

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  • Sochirca, Elena
  • Afonso, Óscar
  • Gil, Pedro Mazeda

Abstract

We develop an extended directed technological change model with vertical and horizontal R&D to analyze the economic growth rate, the technological-knowledge bias and the industrial structure, assuming: (i) complementarities between intermediate goods, and (ii) internal costly investment. We find that complementarities directly affect long-run technological-knowledge bias and relative production, both elements influence the economic growth rate and neither affects the skill premium and the relative number of firms. We also verify that the relationship between the relative supply of skills and both economic growth and the industrial structure suggested by our model is qualitatively consistent with recent empirical data for a number of developed countries.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 32 (2013)
Issue (Month): C ()
Pages: 440-451

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Handle: RePEc:eee:ecmode:v:32:y:2013:i:c:p:440-451

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Vertical and horizontal R&D; Technological-knowledge bias; Industrial structure; Complementarities; Costly investment;

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References

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