Perpetual leapfrogging in international competition
AbstractTechnological leadership has shifted at various times from one country to another. This analysis proposes a mechanism that endogenously explains this perpetual cycle of technological leapfrogging by incorporating international knowledge spillovers into a two-country dynamic model of innovation with the dynamic optimization of an infinitely-lived consumer. In the model, innovation productivity in each country endogenously increases over time because of domestic learning-by-doing and learning from foreign capital. The analysis shows that if international spillovers through learning from foreign capital are sufficiently large, technological leadership may first shift from one country to another, and then perpetually alternate between the two countries.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40126.
Date of creation: Jun 2012
Date of revision: Jul 2012
Perpetual leapfrogging; innovation; spillovers;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-16 (All new papers)
- NEP-COM-2012-09-16 (Industrial Competition)
- NEP-INO-2012-09-16 (Innovation)
- NEP-INT-2012-09-16 (International Trade)
- NEP-KNM-2012-09-16 (Knowledge Management & Knowledge Economy)
- NEP-MAC-2012-09-16 (Macroeconomics)
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