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Phases of Imitation and Innovation in a North-South Endogenous Growth Model

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  • David Currie
  • Paul Levine

    ()

  • Joeseph Pearlman
  • Michael Chui

Abstract

In this paper, we develop a North-South endogenous growth model to examine three phases of development in the South: imitation of Northern products, imitation and innovation and finally, innovation only. In particular, the model has the features of catching up (and potentially overtaking) which are of particular relevance to the Pacific Rim economies. We show that the possible equilibria depend on cross-country assimilation effects and the ease of imitation. We then apply the model to analyse the impact of R&D subsidies. There are some clear global policy implications which emerge from our analysis. Firstly, because subsidies to Southern innovation benefit the North as well, it is beneficial to the North to pay for some of these subsidies. Secondly, because the ability of the South to assimilate Northern knowledge and innovate depends on Southern skills levels, the consequent spillover benefits on growth make the subsidising of Southern education by the North particularly attractive.

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Bibliographic Info

Paper provided by School of Economics, University of Surrey in its series School of Economics Discussion Papers with number 9602.

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Length: 26 pages
Date of creation: Jul 1996
Date of revision:
Handle: RePEc:sur:surrec:9602

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References

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  1. Segerstrom, Paul S, 1991. "Innovation, Imitation, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 807-27, August.
  2. Gene M. Grossman & Elhanan Helpman, 1991. "Comparative Advantage and Long-Run Growth," NBER Working Papers 2809, National Bureau of Economic Research, Inc.
  3. Stokey, Nancy L, 1995. "R&D and Economic Growth," Review of Economic Studies, Wiley Blackwell, vol. 62(3), pages 469-89, July.
  4. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  5. Devereux, M.B. & Lapham, B.J., 1993. "The Stability of Economic Integration and Endogenous Growth," UBC Departmental Archives 93-08, UBC Department of Economics.
  6. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-91, December.
  7. Jones, Charles I, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 495-525, May.
  8. Helpman, E., 1992. "Innovation, Imitation and intellectual Property Rights," Harvard Institute of Economic Research Working Papers 1597, Harvard - Institute of Economic Research.
  9. Dinopoulos, Elias & Oehmke, James F. & Segerstrom, Paul S., 1993. "High-technology-industry trade and investment : The role of factor endowments," Journal of International Economics, Elsevier, vol. 34(1-2), pages 49-71, February.
  10. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-19, December.
  11. Klaus Waelde, 1994. "Transitional dynamics, convergence and international capital flows in two-country models of innovation and growth," International Trade 9403002, EconWPA, revised 06 Apr 1994.
  12. Paul Krugman, 1989. "Is Bilateralism Bad?," NBER Working Papers 2972, National Bureau of Economic Research, Inc.
  13. Luis A. Rivera-Batiz & Paul M. Romer, 1992. "International Trade with Endogenous Technological Change," NBER Working Papers 3594, National Bureau of Economic Research, Inc.
  14. Chou, Chien-Fu & Shy, Oz, 1991. "A Model of Technology Gap, Product Cycle, and the Process of Catching Up between the North and the South," The Economic Record, The Economic Society of Australia, vol. 67(198), pages 217-26, September.
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Citations

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Cited by:
  1. Temple, Paul & Williams, Geoffrey, 2002. "Infra-technology and economic performance: evidence from the United Kingdom measurement infrastructure," Information Economics and Policy, Elsevier, vol. 14(4), pages 435-452, December.
  2. Michael Wycherley, 2010. "Innovation versus Imitation: Intellectual Property Rights in a North-South Framework," DEGIT Conference Papers c015_011, DEGIT, Dynamics, Economic Growth, and International Trade.
  3. Ainura Uzagalieva & Evžen Kocenda & Antonio Menezes, 2010. "Technological Imitation and Innovation in New European Union Markets," CESifo Working Paper Series 3039, CESifo Group Munich.
  4. Christian Lorenczik & Monique Newiak, 2010. "Imitation and Innovation Driven Development under Imperfect Intellectual Property Rights," DEGIT Conference Papers c015_056, DEGIT, Dynamics, Economic Growth, and International Trade.
  5. Perez-Sebastian, Fidel, 2007. "Public support to innovation and imitation in a non-scale growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 31(12), pages 3791-3821, December.
  6. Carlos A. Cinquetti, 2007. "Technology Service And Factor Intensity: The Export Impact From Multinationals," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 056, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  7. Fidel Pérez Sebastián, 2001. "Growth And Public Support To Innovation And Imitation," Working Papers. Serie AD 2001-31, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  8. Ralf Ruhwedel & Michael Funke, 2000. "Export Variety and Export Performance: Empirical Evidence from East Asia," Quantitative Macroeconomics Working Papers 20006, Hamburg University, Department of Economics.
  9. Wolf-Heimo Grieben, 2006. "Globalization with labor market frictions and non-scale growth," Working Papers of the Research Group Heterogenous Labor 06-09, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  10. Olfa CHEHAIDER, 2009. "Les Déterminants De L’Activité De Recherche Et Développement Des Entreprises Manufacturières Tunisiennes," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 29, pages 159-179.
  11. Mondal, Debasis & Ranjan Gupta, Manash, 2009. "Endogenous imitation and endogenous growth in a North-South model: A theoretical analysis," Journal of Macroeconomics, Elsevier, vol. 31(4), pages 668-684, December.
  12. Chui, Michael & Levine, Paul & Pearlman, Joseph, 2001. "Winners and losers in a North-South model of growth, innovation and product cycles," Journal of Development Economics, Elsevier, vol. 65(2), pages 333-365, August.
  13. Michael Funke & Ralf Ruhwedel, 2002. "Export variety and export performance: Empirical evidence for the OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(1), pages 97-114, March.
  14. Michael Wycherley, 2011. "Innovation versus Imitation: Intellectual Property Rights in a North-South Framework," Trinity Economics Papers tep2011, Trinity College Dublin, Department of Economics.
  15. repec:oxf:wpaper:045 is not listed on IDEAS
  16. Rubin, Raphael, 2007. "Endogènisation des comportements migratoires des travailleurs qualifies induits par l’implantation des multinationales au Sud," MPRA Paper 4602, University Library of Munich, Germany.
  17. Takanori Shimizu & Hisayuki Okamoto, 2005. "An analysis of stability of the north-south growth model of trade: Saddle-path stability of the generalized grossman-helpman model with skilled and unskilled labours," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 14(3), pages 299-317.
  18. Wolf-Heimo GRIEBEN, 2004. "Globalization, Labor Market Rigidities and Multiple Equilibria," DEGIT Conference Papers c009_020, DEGIT, Dynamics, Economic Growth, and International Trade.
  19. Andre Varella Mollick & Joao Ricardo Faria & Pedro H. Albuquerque & Miguel A. Leon-Ledesma, 2005. "Can Globalisation Stop the Decline in Commodities' Terms of Trade? The Prebisch-Singer Hypothesis Revisited"," Studies in Economics 0510, Department of Economics, University of Kent.
  20. Agenor, Pierre-Richard & Canuto, Otaviano, 2012. "Middle-income growth traps," Policy Research Working Paper Series 6210, The World Bank.

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