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Endogenous growth and structural change through vertical and horizontal innovations

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  • Bondarev, Anton
  • Greiner, Alfred

Abstract

This paper combines horizontal and vertical innovations to generate an endogenous growth model allowing for structural change as an endogenous phenomenon. Every industry is profitable only for a limited period of time, making the effective time of existence of the technology endogenous and finite. We find that in such an economy endogenous structural change is the source of ongoing economic growth. Further, the range of existing sectors stays constat as well as growth rates as long as the technologies are symmetric.

Suggested Citation

  • Bondarev, Anton & Greiner, Alfred, 2017. "Endogenous growth and structural change through vertical and horizontal innovations," Working papers 2017/05, Faculty of Business and Economics - University of Basel.
  • Handle: RePEc:bsl:wpaper:2017/05
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    File URL: https://edoc.unibas.ch/61312/1/20180306092835_5a9e513322bad.pdf
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    References listed on IDEAS

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    1. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
    2. Bondarev, Anton, 2014. "Endogenous specialization of heterogeneous innovative activities of firms under the technological spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 38(C), pages 235-249.
    3. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    4. Boucekkine, Raouf & del Rio, Fernando & Licandro, Omar, 2005. "Obsolescence and modernization in the growth process," Journal of Development Economics, Elsevier, vol. 77(1), pages 153-171, June.
    5. Anton Bondarev, 2012. "The long-run dynamics of product and process innovations for a multi-product monopolist," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(8), pages 775-799, November.
    6. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2012. "Does intellectual monopoly stimulate or stifle innovation?," European Economic Review, Elsevier, vol. 56(4), pages 727-746.
    7. Meckl, Jürgen, 1999. "Structural change and generalized balanced growth," Discussion Papers, Series I 298, University of Konstanz, Department of Economics.
    8. Hillard G. Huntington, 2010. "Structural Change and U.S. Energy Use: Recent Patterns," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 25-40.
    9. Chu, Angus C., 2011. "The welfare cost of one-size-fits-all patent protection," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 876-890, June.
    10. Acemoglu, Daron & Cao, Dan, 2015. "Innovation by entrants and incumbents," Journal of Economic Theory, Elsevier, vol. 157(C), pages 255-294.
    11. John Laitner, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 545-561.
    12. Gene M. Grossman & Elhanan Helpman, 1993. "Innovation and Growth in the Global Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262570971, May.
    13. Pietro Peretto & Michelle Connolly, 2007. "The Manhattan Metaphor," Journal of Economic Growth, Springer, vol. 12(4), pages 329-350, December.
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    Cited by:

    1. Greiner, Alfred & Bondarev, Anton, 2017. "Optimal R&D investment with learning-by-doing: Multiple steady-states and thresholds," Working papers 2017/06, Faculty of Business and Economics - University of Basel.
    2. Bondarev, Anton & Greiner, Alfred, 2017. "Environmental pollution in a growing economy with endogenous structural change," Working papers 2017/03, Faculty of Business and Economics - University of Basel.
    3. Bondarev, Anton, 2018. "Heterogeneous R&D spillovers and sustainable growth: Limits to efficient regulation," Working papers 2018/04, Faculty of Business and Economics - University of Basel.

    More about this item

    Keywords

    Endogenous Growth; Creative Destruction; Arrow Replacement Effect; Endogenous Structural Change; Horizontal Innovation; Endogenous Patents;

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