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A dual economy model of endogenous growth with R&D and market structure

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  • Thanh Le

Abstract

This paper develops a dual economy endogenous growth model to consider the effects of market structure and innovation on the rate of growth of an economy. There is an innovative goods sector where firms consistently invest in research and development to produce new products within a framework of monopolistic competition. Firms in the traditional goods sector produce a homogenous good, compete in a form of oligopoly (quantity competition), and seek to reduce their production costs. It is shown that growth is increasing in the market power that firms in the innovative goods sector obtain but decreasing in the equilibrium number of firms in the traditional goods sector.
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  • Thanh Le, 2008. "A dual economy model of endogenous growth with R&D and market structure," Journal of Evolutionary Economics, Springer, vol. 18(3), pages 349-366, August.
    • Handle: RePEc:spr:joevec:v:18:y:2008:i:3:p:349-366
    DOI: 10.1007/s00191-008-0099-3
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    Cited by:

    1. Le, Thanh & Le Van, Cuong, 2018. "Research and development and sustainable growth over alternative types of natural resources," Economic Modelling, Elsevier, vol. 70(C), pages 215-229.

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    More about this item

    Keywords

    Market structure; R&D; Economic growth; D43; O31; O33; O41;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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