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Competition and growth: reinterpreting their relationship

  • ONORI, Daria

    ()

    (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; University of Rome "La Sapienza", Faculty of Economics, I-00161 Rome, Italy)

In this paper we modify a standard quality ladder model by assuming that R&D is driven by outsider firms and the winners of the race sell licenses over their patents, instead of entering directly the inter- mediate good sector. As a reward they get the aggregate profit of the industry. Moreover, in the intermediate good sector firms compete à la Cournot and it is assumed that there are spillovers represented by strategic complementarities on costs. Our goal is to prove that there exists an interval of values of the spillover parameter such that the relationship between competition and growth is an inverted-U-shape.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2010033.

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Date of creation: 01 Jul 2010
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Handle: RePEc:cor:louvco:2010033
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