Innovating Firms and Aggregate Innovation
De develop a parsimonious model of innovating firms rich enough to confront firm-level evidence. It captures the dynamic behavior of individual heterogeneous firms, describes the evolution of an industry with simultaneous entry and exit, and delivers a general equilibrium model of technological change. While unifying the theoretical analysis of firms, industries, and the aggregate economy, the models yields insight into empirical work on innovating firms. It accounts for the persistence over time of firms’ R & D investments, the concentration of R & D among incumbents firms, and the link between R & D and patenting . Furthermore, it explains why R & D as a fraction of revenues is strongly related to firm productivity yet largely unrelated to firm size or growth.
|Date of creation:||15 Feb 2002|
|Date of revision:|
|Publication status:||Forthcoming in Journal of Political Economy, pages 2004.|
|Contact details of provider:|| Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway|
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
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References listed on IDEAS
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139, Department of Economics and Business, Universitat Pompeu Fabra.
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- Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75, pages 321.
- R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
- Li, Chol-Won, 2001. "On the Policy Implications of Endogenous Technological Progress," Economic Journal, Royal Economic Society, vol. 111(471), pages C164-79, May.
- anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2, 4-6.
- Robert J. Barro, 1995.
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5326, National Bureau of Economic Research, Inc.
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