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Competition and Growth: Reinterpreting their Relationship

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  • Daria Onori

    ()
    (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS; Université catholique de Louvain, IRES; University of Rome “La Sapienza”, Departement of Economics and Law, Faculty of Economics)

Abstract

In this paper we modify a standard quality ladder model by assuming that R&D is driven by outsider firms and the winners of the race sell licenses over their patents, instead of entering directly the intermediate good sector. As a reward they get the aggregate profit of the industry. Moreover, in the intermediate good sector firms compete à la Cournot and it is assumed that there are spillovers represented by strategic complementarities on costs. We prove that there exists an interval of values of the spillover parameter such that the relationship between competition and growth is an inverted-U-shape.

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Bibliographic Info

Paper provided by Aix-Marseille School of Economics, Marseille, France in its series AMSE Working Papers with number 1324.

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Length: 37 pages
Date of creation: 02 Apr 2013
Date of revision:
Handle: RePEc:aim:wpaimx:1324

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Web page: http://www.amse-aixmarseille.fr/en
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Keywords: quality ladder; Cournot oligopoly; strategic complementarities; competition;

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Cited by:
  1. Daria ONORI, 2011. "Welfare, Competition, Specialization and Growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011011, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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