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An Evolutionary Model of Industrial Growth and Structural Change



This paper explores the rules which regulate market shares dynamics within industries jointly with the mechanisms underpinning a process of general evolution in which n sectors grow at different rates and structural change takes place. It introduces a selection equation, which allows for selection within and between sectors and explores the forces that can account for the differential growth of different industries. Sectoral and aggregate productivity growth rates depend upon a sorting and a selection mechanism between and within sectors, which continuously changes the relative position of competing firms. This paper generalises Metcalfe’s Fisher Principle (Metcalfe, 1998) results to a multi-sectoral economy.

Suggested Citation

  • Fabio Montobbio, 2000. "An Evolutionary Model of Industrial Growth and Structural Change," KITeS Working Papers 121, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2000.
  • Handle: RePEc:cri:cespri:wp121

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    References listed on IDEAS

    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Metcalfe, J S, 1994. "Competition, Fisher's Principle and Increasing Returns in the Selection Process," Journal of Evolutionary Economics, Springer, vol. 4(4), pages 327-346, November.
    3. Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 287-320.
    4. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    5. Saviotti, P P & Mani, G S, 1995. "Competition, Variety and Technological Evolution: A Replicator Dynamics Model," Journal of Evolutionary Economics, Springer, vol. 5(4), pages 369-392, December.
    6. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-583, June.
    7. Cohen, Michael D, et al, 1996. "Routines and Other Recurring Action Patterns of Organizations: Contemporary Research Issues," Industrial and Corporate Change, Oxford University Press, vol. 5(3), pages 653-698.
    8. Baumol, William J & Blackman, Sue Anne Batey & Wolff, Edward N, 1985. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, American Economic Association, vol. 75(4), pages 806-817, September.
    9. Notarangelo, Micaela, 1999. "Unbalanced growth: a case of structural dynamics," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 209-223, June.
    10. Klepper, Steven, 1997. "Industry Life Cycles," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 145-181.
    11. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-1171, September.
    12. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
    13. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    14. Saviotti, P. P., 1988. "Information, variety and entropy in technoeconomic development," Research Policy, Elsevier, vol. 17(2), pages 89-103, April.
    15. Paolo ERCOLANI, 1994. "La terziarizzazione dell'occupazione. Analisi delle cause e dei problemi aperti," Working Papers 54, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
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    More about this item


    Structural change; Evolutionary economics; Selection;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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