Competition and Growth in an Endogenous Growth Model with Expanding Product Variety without Scale Effects
AbstractThe aim of this paper is to analyse the relationship between competition and growth in an endogenous growth model with expanding product variety without scale effect. In order to do this, we develop an extension of the Bucci (2005) model in which we eliminate the scale effects. We find that the relationship between competition and growth is always inverted U shaped. We explain this result by the composition of two effects on growth : resource allocation and profit incentive effects. For low values of product market competition, an increase of competition has an positive effect on growth. For large values of competition, we have a negative relationship between competition and growth.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 6179.
Date of creation: 10 Nov 2007
Date of revision: 08 Dec 2007
Endogenous Growth; Horizontal Differentiation; Technological Change; Imperfect Competition;
Find related papers by JEL classification:
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-12-15 (All new papers)
- NEP-COM-2007-12-15 (Industrial Competition)
- NEP-CSE-2007-12-15 (Economics of Strategic Management)
- NEP-DGE-2007-12-15 (Dynamic General Equilibrium)
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- Bianco, Dominique, 2009.
"Competition and Growth in an Endogenous Growth Model with Expanding product Variety without Scale Effects Revisited,"
16670, University Library of Munich, Germany.
- Dominique BIANCO, 2009. "Competiton And Growth In An Endogenous Growth Model With Expanding Product Variety Without Scale Effects Revisited," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(4(10)_Win), pages 502-508.
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