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Product variety, competition and economic growth

In: Schumpeterian Perspectives on Innovation, Competition and Growth

Author

Listed:
  • Pier Paolo Saviotti

    (UMR GAEL, Université Pierre Mendès-France
    CNRS GREDEG)

  • Andreas Pyka

    (University of Bremen)

Abstract

In this paper, we study the relationship between competition and economic growth using a model of economic development through the creation of new sectors. In our model, competition has both an intra- and an inter-sector component. We find that the best conditions for economic development are achieved when a suitable ratio of inter- to intra-sector competition is achieved. This ratio constitutes a compromise between providing a temporary monopoly to the first entrepreneur (low inter-sector competition) and creating enough imitation to expand the sector (intra-sector competition).

Suggested Citation

  • Pier Paolo Saviotti & Andreas Pyka, 2009. "Product variety, competition and economic growth," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 71-95, Springer.
  • Handle: RePEc:spr:sprchp:978-3-540-93777-7_6
    DOI: 10.1007/978-3-540-93777-7_6
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    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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