IDEAS home Printed from https://ideas.repec.org/a/kea/keappr/ker-200612-22-2-04.html
   My bibliography  Save this article

Optimal R&D Competition and Economic Growth

Author

Listed:
  • Gwanghoon Lee

    (Chung-Ang University)

Abstract

The optimality of R&D competition and its implications on growth and welfare are analyzed in a dynamic general equilibrium model. By explicitly incorporating pre-emptive R&D competition, the relationship between the intensity of competition and the growth rate can be investigated. This paper shows that in the competitive growth path, the number of research firms is larger and the rate of growth is lower than in the optimal growth path. By reducing entry into R&D competition by imposing an entry fee from which the winner of competition is subsidized, this sub-optimality arising from excessive competition could be overcome.

Suggested Citation

  • Gwanghoon Lee, 2006. "Optimal R&D Competition and Economic Growth," Korean Economic Review, Korean Economic Association, vol. 22, pages 267-297.
    • Handle: RePEc:kea:keappr:ker-200612-22-2-04
    as

    Download full text from publisher

    File URL: http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-200612-22-2-04.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chung, Tai-Yeong, 1996. "Rent-Seeking Contest When the Prize Increases with Aggregate Efforts," Public Choice, Springer, vol. 87(1-2), pages 55-66, April.
    2. Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
    3. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 495-525.
    4. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
    5. Peretto, Pietro F, 1996. "Sunk Costs, Market Structure, and Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 895-923, November.
    6. Theo S. Eicher, 1996. "Interaction Between Endogenous Human Capital and Technological Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(1), pages 127-144.
    7. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, December.
    8. Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 429-436.
    9. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
    Full references (including those not matched with items on IDEAS)

    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. Blackburn, Keith & Hung, Victor T. Y. & Pozzolo, Alberto F., 2000. "Research, Development and Human Capital Accumulation," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 189-206, April.
    2. Carmelo Pierpaolo Parello, 2022. "Migration and growth in a Schumpeterian growth model with creative destruction [A model of growth through creative destruction]," Oxford Economic Papers, Oxford University Press, vol. 74(4), pages 1139-1166.
    3. Klaus Prettner, 2013. "Population aging and endogenous economic growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 811-834, April.
    4. Prettner, Klaus, 2013. "Public education, technological change and economic prosperity," University of Göttingen Working Papers in Economics 149, University of Goettingen, Department of Economics.
    5. Alberto Franco Pozzolo, 2004. "Endogenous growth in open economies: a surveys," Temi di discussione (Economic working papers) 527, Bank of Italy, Economic Research and International Relations Area.
    6. Schreiner, Lena & Madlener, Reinhard, 2022. "Investing in power grid infrastructure as a flexibility option: A DSGE assessment for Germany," Energy Economics, Elsevier, vol. 107(C).
    7. Theo S. Eicher & Stephen J. Turnovsky & Uwe Walz, 2000. "Optimal Policy for Financial Market Liberalizations: Decentralization and Capital Flow Reversals," German Economic Review, Verein für Socialpolitik, vol. 1(1), pages 19-42, February.
    8. Ledezma, Ivan, 2013. "Defensive strategies in quality ladders," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 176-194.
    9. Turnovsky, S., 2000. "Growth in an Open Economy: some Recent Developments," Papers 5, Warwick - Development Economics Research Centre.
    10. Trew, Alex, 2009. "Institutions and the Scale Effect," SIRE Discussion Papers 2009-51, Scottish Institute for Research in Economics (SIRE).
    11. Klaus Prettner, 2012. "Public education, technological change and economic prosperity: semi-endogenous growth revisited," PGDA Working Papers 9012, Program on the Global Demography of Aging.
    12. Hélène Latzer & Kiminori Matsuyama & Mathieu Parenti, 2018. "The market Size Effect in Endogenous Growth Reconsidered," Documents de travail du Centre d'Economie de la Sorbonne 18032, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    13. Peretto, Pietro F., 1999. "Industrial development, technological change, and long-run growth," Journal of Development Economics, Elsevier, vol. 59(2), pages 389-417, August.
    14. Frederic Tournemaine & Pongsak Luangaram, 2012. "R&D, human capital, fertility, and growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 923-953, July.
    15. Ben Fine, 1998. "Endogenous Growth Theory: A Critical Assessment," Working Papers 80, Department of Economics, SOAS University of London, UK.
    16. Stephen Turnovsky, 1999. "Knife-Edge Conditions and the Macroeconomics of Small Open Economies," Discussion Papers in Economics at the University of Washington 0031, Department of Economics at the University of Washington.
    17. Norman Sedgley & Bruce Elmslie, 2011. "Do We Still Need Cities? Evidence on Rates of Innovation from Count Data Models of Metropolitan Statistical Area Patents," American Journal of Economics and Sociology, Wiley Blackwell, vol. 70(1), pages 86-108, January.
    18. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    19. Simon Wiederhold, 2012. "The Role of Public Procurement in Innovation: Theory and Empirical Evidence," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 43.
    20. Tsur, Yacov & Zemel, Amos, 2002. "On Knowledge-Based Economic Growth," Discussion Papers 14997, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.

    More about this item

    Keywords

    R&D competition; Economic growth; Constrained optimality; Human capital;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    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:kea:keappr:ker-200612-22-2-04. 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: KEA (email available below). General contact details of provider: https://edirc.repec.org/data/keaaaea.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.