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Can Social Norms Affect the International Allocation of Innovation?

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  • Guido Cozzi

Abstract

If economic agents coordinate on social norms more oriented towards the protection of national industries, an asymmetric international specialization in the research and development (R&D) arises even in a tariff free world with no a priori differences across countries in endowments, demography or technology. This paper exploits the indifference in the composition of R&D expenditure across sectors of the typical multi-sector Schumpeterian framework (forward-looking decisions, CRS R&D technology and free entry) to construct a theory of the international allocation of innovation and education based on sunspot equilibrium. A role for industrial policies as mere coordination devices emerges in an international Schumpeterian framework. The implications for the relationships between inequality and growth are examined.

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Paper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 2008_02.

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Handle: RePEc:gla:glaewp:2008_02

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Keywords: Schumpeterian Growth Theory; Inequality; International Trade; Social Norms; Indeterminacy; Sunspots.;

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Cited by:
  1. Guido Cozzi & Giammario Impullitti, 2008. "Government spending composition, technical change and wage inequality," Working Papers 2009_02, Business School - Economics, University of Glasgow.

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