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Horizontal Innovation-Based Growth and Product Market Competition

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  • Alberto Bucci

    (Department of Economics, Business and Statistics, University of Milan)

  • Carmelo Parello

    (Catholic University of Louvain)

Abstract

The influence of the degree of competition in the goods market on growth is analyzed by developing an endogenous growth model with horizontal innovation. Product market competition is measured by (1- Lerner index) and depends on both the share of factor inputs in total income and on the elasticity of substitution across goods. We find that the shape of the relationship between competition and growth can change dramatically according to which proxy of competition is used. We interpret our results in terms of the interplay between the resource allocation and the profit incentive effects.

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Bibliographic Info

Paper provided by Universitá degli Studi di Milano in its series UNIMI - Research Papers in Economics, Business, and Statistics with number unimi-1032.

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Date of creation: 18 Jul 2006
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Handle: RePEc:bep:unimip:unimi-1032

Note: oai:cdlib1:unimi-1032
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Keywords: Innovation; Product Market Competition; Endogenous Growth; Scale Effects;

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References

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Citations

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Cited by:
  1. Bianco, Dominique, 2007. "R&D, Competition and Growth with Human Capital Accumulation : A Comment," MPRA Paper 5243, University Library of Munich, Germany.
  2. Alberto Bucci, 2014. "Population, competition, innovation, and economic growth with and without human capital investment," International Review of Economics, Springer, vol. 61(1), pages 61-84, April.
  3. 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.
  4. Ivan Savin & Peter Winker, 2012. "Heuristic Optimization Methods for Dynamic Panel Data Model Selection: Application on the Russian Innovative Performance," Computational Economics, Society for Computational Economics, vol. 39(4), pages 337-363, April.
  5. Daria Onori, 2011. "Welfare, Competition, Specialization and Growth," Working Papers halshs-00580722, HAL.
  6. Wang, Vey & Lai, Chung-Hui, 2011. "Franchise fee, competition and economic growth," Economic Modelling, Elsevier, vol. 28(5), pages 2090-2099, September.
  7. Yılmaz, Ensar, 2013. "Competition, taxation and economic growth," Economic Modelling, Elsevier, vol. 35(C), pages 134-139.

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