IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v178y2019icp13-17.html
   My bibliography  Save this article

Growth: Scale or market-size effects?

Author

Listed:
  • Chu, Angus C.
  • Cozzi, Guido

Abstract

Is the supply of researchers or the demand for technologies more important for innovation? The supply of research labor captures a scale effect, whereas the demand from production labor for technologies captures a market-size effect. We find that both the scale effect and the market-size effect are important for innovation and their relative importance depends on R&D labor intensity. We collect data on R&D labor intensity and find that it varies significantly across countries.

Suggested Citation

  • Chu, Angus C. & Cozzi, Guido, 2019. "Growth: Scale or market-size effects?," Economics Letters, Elsevier, vol. 178(C), pages 13-17.
  • Handle: RePEc:eee:ecolet:v:178:y:2019:i:c:p:13-17
    DOI: 10.1016/j.econlet.2019.01.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176519300047
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cozzi, Guido & Giordani, Paolo E. & Zamparelli, Luca, 2007. "The refoundation of the symmetric equilibrium in Schumpeterian growth models," Journal of Economic Theory, Elsevier, vol. 136(1), pages 788-797, September.
    2. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    3. Daron Acemoglu, 2002. "Directed Technical Change," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 781-809.
    4. Charles I. Jones, 1999. "Growth: With or Without Scale Effects?," American Economic Review, American Economic Association, vol. 89(2), pages 139-144, May.
    5. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 43-61.
    6. repec:eee:ecolet:v:178:y:2019:i:c:p:13-17 is not listed on IDEAS
    7. Christopher Laincz & Pietro Peretto, 2006. "Scale effects in endogenous growth theory: an error of aggregation not specification," Journal of Economic Growth, Springer, vol. 11(3), pages 263-288, September.
    8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    9. Peretto, Pietro F., 2018. "Robust endogenous growth," European Economic Review, Elsevier, vol. 108(C), pages 49-77.
    10. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
    11. Cozzi, Guido, 2017. "Endogenous growth, semi-endogenous growth... or both? A simple hybrid model," Economics Letters, Elsevier, vol. 154(C), pages 28-30.
    12. Cozzi, Guido, 2017. "Combining semi-endogenous and fully endogenous growth: A generalization," Economics Letters, Elsevier, vol. 155(C), pages 89-91.
    13. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    14. Peretto, Pietro F, 1998. "Technological Change and Population Growth," Journal of Economic Growth, Springer, vol. 3(4), pages 283-311, December.
    15. Peretto, Pietro F., 1999. "Cost reduction, entry, and the interdependence of market structure and economic growth," Journal of Monetary Economics, Elsevier, vol. 43(1), pages 173-195, February.
    16. Chu, Angus C. & Cozzi, Guido, 2019. "Growth: Scale or market-size effects?," Economics Letters, Elsevier, vol. 178(C), pages 13-17.
    17. Smulders, Sjak & van de Klundert, Theo, 1995. "Imperfect competition, concentration and growth with firm-specific R & D," European Economic Review, Elsevier, vol. 39(1), pages 139-160, January.
    18. 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 1077-1091, December.
    19. Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August.
    20. Cozzi Guido, 2007. "The Arrow Effect under Competitive R&D," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-20, January.
    21. Lewis Evans & Neil Quigley & Jie Zhang, 2003. "Optimal price regulation in a growth model with monopolistic suppliers of intermediate goods," Canadian Journal of Economics, Canadian Economics Association, vol. 36(2), pages 463-474, 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. Chu, Angus C. & Cozzi, Guido, 2019. "Growth: Scale or market-size effects?," Economics Letters, Elsevier, vol. 178(C), pages 13-17.

    More about this item

    Keywords

    Innovation; Economic growth; Scale effects; Market-size effects;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    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:eee:ecolet:v:178:y:2019:i:c:p:13-17. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.