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Competition, R&D Activities and Endogenous Growth


  • Antonio, MINNITI

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))


A prediction of the endogenous growth models with quality ladders is that there exists a negative relation between growth and the degree of market competition. The aim of this article is to shed light on the relation between competition and growth when horizontal and vertical innovations can simultaneously occur by adopting the structure of the patent race model; we show the way in which the toughness of competition influences the firms’ incentives to invest in the two R&D activities; in particular, the presence of vertical and horizontal differentiation can determine a non monotonic long run relationship between competition and growth.

Suggested Citation

  • Antonio, MINNITI, 2003. "Competition, R&D Activities and Endogenous Growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2004009, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2004009

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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. Jan Boone, 2000. "Competitive Pressure: The Effects on Investments in Product and Process Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 549-569, Autumn.
    3. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
    4. Segerstrom, Paul S, 2000. "The Long-Run Growth Effects of R&D Subsidies," Journal of Economic Growth, Springer, vol. 5(3), pages 277-305, September.
    5. Boone, Jan, 2001. "Intensity of competition and the incentive to innovate," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 705-726, April.
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    More about this item


    Growth; Competition; Vertical and Horizontal Innovations;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models


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