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Perpetual leapfrogging in international competition

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  • Furukawa, Yuichi

Abstract

Technological 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 Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 40126.

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Date of creation: Jun 2012
Date of revision: Jul 2012
Handle: RePEc:pra:mprapa:40126

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Keywords: Perpetual leapfrogging; innovation; spillovers;

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  12. Li, Chol-Won, 2001. "On the Policy Implications of Endogenous Technological Progress," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(471), pages C164-79, May.
  13. Elise Brezis & Daniel Tsiddon, 1998. "Economic growth, leadership and capital flows: the leapfrogging effect," The Journal of International Trade & Economic Development, Taylor & Francis Journals, Taylor & Francis Journals, vol. 7(3), pages 261-277.
  14. Ohyama, Michihiro & Jones, Ronald W, 1995. "Technology Choice, Overtaking, and Comparative Advantage," Review of International Economics, Wiley Blackwell, vol. 3(2), pages 224-34, June.
  15. Giovannetti, E., 2000. "Perpetual Leapfrogging in Bertrand Duopoly," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 0012, Faculty of Economics, University of Cambridge.
  16. Elise S. Brezis, 1995. "Foreign capital flows in the century of Britain's industrial revolution: new estimates, controlled conjectures," Economic History Review, Economic History Society, Economic History Society, vol. 48(1), pages 46-67, 02.
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