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Innovation, Imitation and Entrepreneurship

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Author Info

  • Grace Li Ann Yong

    (Centre for Research in Pedagogy and Practice, National Institute of Education, Singapore)

  • Kong Weng Ho

    (Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore)

Abstract

This paper analyzes the gradual shift in the technological paradigm of an economy as it approaches the world technology frontier. The model developed in this paper consists of firms which employ skilled workers as an important input in technological advancement, but the novel feature here is the entrepreneur, who is the brain of technological progress. The entrepreneur has to decide to undertake either imitative or innovative activities, of which decision both affects and is affected by the country’s distance to frontier. Specifically, the entrepreneur needs to have a minimum ability threshold level in order to carry out innovation. This endogenous threshold level falls as the economy moves closer to the technological frontier, enabling more entrepreneurs to be engaged in an innovation-based strategy, and consequently, moving the economy from a technological structure that is based on imitation of foreign technologies to one where domestic innovation dominates. The transitional dynamics of the model shows that there exists a steady state distance from the world frontier that countries will eventually converge to. We also find that it is possible for countries under certain conditions, to be trapped in a regime carrying out only imitation of world technologies.

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File URL: http://www.ntu.edu.sg/hss2/egc/wp/2006/2006-07.pdf
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Bibliographic Info

Paper provided by Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre in its series Economic Growth centre Working Paper Series with number 0607.

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Length: 31 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:nan:wpaper:0607

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Keywords: Technology diffusion; innovation; entrepreneurship; growth;

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References

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  1. Jörg MAYER, 2001. "Technology Diffusion, Human Capital And Economic Growth In Developing Countries," UNCTAD Discussion Papers 154, United Nations Conference on Trade and Development.
  2. David Audretsch & Michael Fritsch, 2003. "Linking Entrepreneurship to Growth: The Case of West Germany," Industry and Innovation, Taylor & Francis Journals, vol. 10(1), pages 65-73.
  3. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander, 1995. "North-South R&D Spillovers," CEPR Discussion Papers 1133, C.E.P.R. Discussion Papers.
  4. Magnus Blomström & Ari Kokko & Mario Zejan, 1994. "Host country competition, labor skills, and technology transfer by multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(3), pages 521-533, September.
  5. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2002. "Vertical Integration and Distance to Frontier," NBER Working Papers 9191, National Bureau of Economic Research, Inc.
  6. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  7. Howitt, Peter & Mayer-Foulkes, David, 2005. "R&D, Implementation, and Stagnation: A Schumpeterian Theory of Convergence Clubs," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(1), pages 147-77, February.
  8. Segerstrom, P.S., 1990. "Innovation, Imitation And Economic Growth," Papers 8818, Michigan State - Econometrics and Economic Theory.
  9. Danny Quah, 2002. "Technology Dissemination and Economic Growth: Some Lessons for the New Economy," CEP Discussion Papers dp0522, Centre for Economic Performance, LSE.
  10. Keller, Wolfgang, 2002. "International Technology Diffusion," CEPR Discussion Papers 3133, C.E.P.R. Discussion Papers.
  11. Zilibotti, Fabrizio & Aghion, Philippe & Acemoglu, Daron, 2006. "Distance to Frontier, Selection, and Economic Growth," Scholarly Articles 4554122, Harvard University Department of Economics.
  12. Richard Kneller, 2005. "Frontier Technology, Absorptive Capacity and Distance," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(1), pages 1-23, 02.
  13. Quah, Danny, 2002. "Technology Dissemination and Economic Growth: Some Lessons for the New Economy," CEPR Discussion Papers 3207, C.E.P.R. Discussion Papers.
  14. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers 189, Cowles Foundation for Research in Economics, Yale University.
  15. Xu, Bin, 2000. "Multinational enterprises, technology diffusion, and host country productivity growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 477-493, August.
  16. Papageorgiou, Chris, 2002. "Technology Adoption, Human Capital, and Growth Theory," Review of Development Economics, Wiley Blackwell, vol. 6(3), pages 351-68, October.
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Cited by:
  1. Dawn DeTienne & Melissa Cardon, 2012. "Impact of founder experience on exit intentions," Small Business Economics, Springer, vol. 38(4), pages 351-374, May.

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