IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/83891.html
   My bibliography  Save this paper

Schumpeterian Creative Class Competition, Innovation Policy, and Regional Economic Growth

Author

Listed:
  • Batabyal, Amitrajeet
  • Yoo, Seung Jick

Abstract

We focus on a region that is creative in the sense of Richard Florida. The creative class is broadly composed of existing and candidate entrepreneurs. The general question we analyze concerns the effects of Schumpeterian competition between existing and candidate entrepreneurs on economic growth and innovation policy in this region. We perform four specific tasks. First, when the flow rate of innovation function for the existing entrepreneurs is strictly concave, we delineate the circumstances in which competition between existing and candidate entrepreneurs leads to a unique balanced growth path (BGP) equilibrium. Second, we examine whether it is possible for the BGP equilibrium to involve different levels of R&D expenditures by the existing entrepreneurs. Third, we show how the BGP equilibrium is altered when the flow rate of innovation function for the existing entrepreneurs is constant. Finally, we study the impact that taxes and subsidies on R&D by existing and candidate entrepreneurs have on R&D expenditures and regional economic growth.

Suggested Citation

  • Batabyal, Amitrajeet & Yoo, Seung Jick, 2017. "Schumpeterian Creative Class Competition, Innovation Policy, and Regional Economic Growth," MPRA Paper 83891, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:83891
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/83891/1/MPRA_paper_83891.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Todd Gabe & Richard Florida & Charlotta Mellander, 2012. "The Creative Class and the crisis," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 6(1), pages 37-53.
    2. Amitrajeet Batabyal & Peter Nijkamp, 2013. "The creative class, its preferences, and unbalanced growth in an urban economy," Journal of Evolutionary Economics, Springer, vol. 23(1), pages 189-209, January.
    3. Richard Florida, 2014. "The Creative Class and Economic Development," Economic Development Quarterly, , vol. 28(3), pages 196-205, August.
    4. Batabyal, Amitrajeet A. & Yoo, Seung Jick, 2017. "On research and development in a model of Schumpeterian economic growth in a creative region," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 69-74.
    5. Acemoglu, Daron & Cao, Dan, 2015. "Innovation by entrants and incumbents," Journal of Economic Theory, Elsevier, vol. 157(C), pages 255-294.
    6. Timo Tohmo, 2015. "The Creative Class Revisited: Does the Creative Class Affect the Birth Rate of High-tech Firms in Nordic Countries?," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 23(01), pages 63-89.
    7. Thiess Buettner & Eckhard Janeba, 2016. "City competition for the creative class," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 40(4), pages 413-451, November.
    8. Esubalew Tiruneh, 2014. "Regional Economic Development in Italy: Applying the Creative Class Thesis to a Test," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 5(1), pages 19-36, March.
    9. Chen, Li-Yueh & Chen, Yu-Fen & Yang, Sheng-Yung, 2017. "Managerial incentives and R&D investments: The moderating effect of the directors’ and officers’ liability insurance," The North American Journal of Economics and Finance, Elsevier, vol. 39(C), pages 210-222.
    10. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    11. Orman, Cuneyt, 2015. "Organization of innovation and capital markets," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 94-114.
    12. Elliot Siemiatycki, 2013. "A Smooth Ride? From Industrial to Creative Urbanism in Oshawa, Ontario," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 37(5), pages 1766-1784, September.
    13. Amitrajeet Batabyal & Peter Nijkamp, 2014. "Innovation, Decentralization, and Planning in a Multi-Region Model of Schumpeterian Economic Growth," Networks and Spatial Economics, Springer, vol. 14(3), pages 605-628, December.
    14. William J. Baumol, 2013. "The Microtheory of Innovative Entrepreneurship," Journal of Economic Sociology, National Research University Higher School of Economics, vol. 14(3), pages 96-108.
    15. Richard Florida & Charlotta Mellander & Kevin Stolarick, 2008. "Inside the black box of regional development: human capital, the creative class and tolerance," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 615-649, September.
    16. Batabyal, Amitrajeet A. & Beladi, Hamid, 2016. "The effects of probabilistic innovations on Schumpeterian economic growth in a creative region," Economic Modelling, Elsevier, vol. 53(C), pages 224-230.
    17. Reza Oladi & Hamid Beladi, 2008. "Is Regionalism Viable? A Case for Global Free Trade," Review of International Economics, Wiley Blackwell, vol. 16(2), pages 293-300, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vita HAVRYLIUK & Andrii HROMYK & Ivan SEMENETS & Tetiana PYLYPIUK & Rostislav MOTSYK & Anna KOSTYAKOVA, 2021. "Digitalization Of Territorial And Economic Systems At The Regional Level," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 209-226, June.
    2. Wang, En-Ze & Lee, Chien-Chiang, 2022. "The impact of clean energy consumption on economic growth in China: Is environmental regulation a curse or a blessing?," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 39-58.
    3. Amitrajeet A. BATABYAL & Seung JICK YOO, 2018. "A Note On Schumpeterian Competition In The Creative Class And Innovation Policy," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 119-125, December.
    4. Kasim Yusupov & Iuliia Toktamysheva & Asat Yangirov & Rustem Akhunov, 2019. "Economic Growth Strategy Based on the Dynamics of Gross Domestic Product," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(1), pages 151-163.
    5. Batabyal, Amitrajeet, 2018. "Creative Class Competition and Innovation in the Absence of Patent Protection," MPRA Paper 89604, University Library of Munich, Germany, revised 17 Apr 2018.
    6. Amitrajeet A. Batabyal & Seung Jick Yoo, 2023. "Using Taxes to Attract the Creative Class in the Presence of a Region-Specific Rent," The Review of Regional Studies, Southern Regional Science Association, vol. 53(2), pages 182-191.
    7. Batabyal, Amitrajeet & Beladi, Hamid, 2021. "On the Existence of an Equilibrium in Models of Local Public Good Use by Cities to Attract the Creative Class," MPRA Paper 105196, University Library of Munich, Germany, revised 07 Jan 2021.
    8. Wentao Yu & Xiaolan Tan, 2022. "The creative class in China: Heterogeneity and its regional determinants," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3466-3478, December.
    9. Chi-Hua Wu & Yu-Lin Chao & Jia-Ting Xiong & Ding-Bang Luh, 2022. "Gamification of Culture: A Strategy for Cultural Preservation and Local Sustainable Development," Sustainability, MDPI, vol. 15(1), pages 1-19, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Batabyal, Amitrajeet, 2018. "Creative Class Competition and Innovation in the Absence of Patent Protection," MPRA Paper 89604, University Library of Munich, Germany, revised 17 Apr 2018.
    2. Batabyal, Amitrajeet A. & Beladi, Hamid, 2018. "Artists, engineers, and aspects of economic growth in a creative region," Economic Modelling, Elsevier, vol. 71(C), pages 214-219.
    3. Batabyal, Amitrajeet A. & Beladi, Hamid, 2016. "The effects of probabilistic innovations on Schumpeterian economic growth in a creative region," Economic Modelling, Elsevier, vol. 53(C), pages 224-230.
    4. Batabyal, Amitrajeet A. & Yoo, Seung Jick, 2017. "On research and development in a model of Schumpeterian economic growth in a creative region," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 69-74.
    5. Amitrajeet Batabyal & Peter Nijkamp, 2013. "A multi-region model of economic growth with human capital and negative externalities in innovation," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 909-924, September.
    6. Wentao Yu & Xiaolan Tan, 2022. "The creative class in China: Heterogeneity and its regional determinants," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3466-3478, December.
    7. Amitrajeet Batabyal & Peter Nijkamp, 2014. "Innovation, Decentralization, and Planning in a Multi-Region Model of Schumpeterian Economic Growth," Networks and Spatial Economics, Springer, vol. 14(3), pages 605-628, December.
    8. Amitrajeet Batabyal & Hamid Beladi, 2014. "A model of trade between creative regions in the presence of sector specific learning by doing," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 573-585, July.
    9. Aghion, Philippe & Akcigit, Ufuk & Howitt, Peter, 2014. "What Do We Learn From Schumpeterian Growth Theory?," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 515-563, Elsevier.
    10. Haifeng Qian, 2013. "Diversity Versus Tolerance: The Social Drivers of Innovation and Entrepreneurship in US Cities," Urban Studies, Urban Studies Journal Limited, vol. 50(13), pages 2718-2735, October.
    11. Yan Zhou & Sangmoon Park, 2020. "The Regional Determinants of the New Venture Formation in China’s Car-Sharing Economy," Sustainability, MDPI, vol. 13(1), pages 1-22, December.
    12. Gabriele Pellegrino, 2018. "Barriers to innovation in young and mature firms," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 181-206, January.
    13. Javier García-Estévez & Néstor Duch-Brown, 2012. "Student graduation: to what extent does university expenditure matter?," Working Papers 2012/4, Institut d'Economia de Barcelona (IEB).
    14. Hamidi, Shima & Zandiatashbar, Ahoura & Bonakdar, Ahmad, 2019. "The relationship between regional compactness and regional innovation capacity (RIC): Empirical evidence from a national study," Technological Forecasting and Social Change, Elsevier, vol. 142(C), pages 394-402.
    15. Antonioli,Davide & Marzucchi,Alberto & Montresor,Sandro, 2012. "Regional innovation policy and innovative behaviours. A propensity score matching evaluation," INGENIO (CSIC-UPV) Working Paper Series 201205, INGENIO (CSIC-UPV).
    16. Niusha Esmaeilpoorarabi & Tan Yigitcanlar & Mirko Guaralda, 2016. "Place quality and urban competitiveness symbiosis? A position paper," International Journal of Knowledge-Based Development, Inderscience Enterprises Ltd, vol. 7(1), pages 4-21.
    17. Haifeng Qian & Zoltán J. Ács, 2015. "An absorptive capacity theory of knowledge spillover entrepreneurship," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 9, pages 161-173, Edward Elgar Publishing.
    18. Esubalew Tiruneh, 2014. "Regional Economic Development in Italy: Applying the Creative Class Thesis to a Test," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 5(1), pages 19-36, March.
    19. Sasaki, Hiroaki, 2020. "Is growth declining in the service economy?," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 26-38.
    20. Amitrajeet A. Batabyal & Peter Nijkamp, 2013. "Human capital use, innovation, patent protection, and economic growth in multiple regions," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(2), pages 113-126, March.

    More about this item

    Keywords

    Creative Class; Creative Destruction; Economic Growth; Innovation Policy; R&D;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:83891. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.