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Innovation and Imitation at Various Stages of Development: A Model with Capital

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  • Polterovich, Victor
  • Tonis, Alexander

Abstract

A simple model of technological imitation and innovation is developed to explain club convergence in the evolution of the distribution of per-capita GDP over countries. Two versions of the model are studied and compared. The first one includes only innovation-imitation tradeoff, and the second one takes into account traditional investment decisions as well. It is shown that the introduction of capital does not affect the general structure of stationary equilibria: in both versions, there are three types of stable steady-state regimes, with only imitation, only innovation or a mixed policy. Using World Bank and ICRG statistical data for the period of 1980-1999, we test our hypothesis about the dependence of innovation and imitation costs on the relative productivity level, savings rate and an indicator of institutional quality. An appropriate choice of adjustment parameters of the model gives a possibility to generate trajectories of more than 80 countries and, for most of them, obtain qualitatively correct pictures of their evolution. The set of these trajectories reveals club convergence. It is shown that taking into account the evolution of the capital stock improves the quality of approximation.

Suggested Citation

  • Polterovich, Victor & Tonis, Alexander, 2005. "Innovation and Imitation at Various Stages of Development: A Model with Capital," MPRA Paper 20067, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:20067
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    References listed on IDEAS

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    1. Polterovich, Victor & Tonis, Alexander, 2003. "Innovation and Imitation at Various Stages of Development," MPRA Paper 20065, University Library of Munich, Germany.
    2. Howitt, Peter & Mayer-Foulkes, David, 2005. "R&D, Implementation, and Stagnation: A Schumpeterian Theory of Convergence Clubs," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(1), pages 147-177, February.
    3. Feyrer James D, 2008. "Convergence by Parts," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-35, July.
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    5. Barro, Robert J, 1996. "Institutions and Growth, an Introductory Essay," Journal of Economic Growth, Springer, vol. 1(2), pages 145-148, June.
    6. Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 501-526.
    7. Barry P. Bosworth & Susan M. Collins, 2003. "The Empirics of Growth: An Update," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 113-206.
    8. Abdelhak Senhadji, 2000. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 1-6.
    9. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-1219, December.
    10. Polterovich, Victor & Henkin, Gennadi, 1998. "A Difference-differential Analogue of the Burgers Equation and Some Models of Economic Development," MPRA Paper 21031, University Library of Munich, Germany.
    11. Iwai, Katsuhito, 1984. "Schumpeterian dynamics : An evolutionary model of innovation and imitation," Journal of Economic Behavior & Organization, Elsevier, vol. 5(2), pages 159-190, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Segarra Blasco, Agustí, 1958- & Gombau, Verònica, 2013. "Young innovative firms and R&D strategies: is the Spanish case different?," Working Papers 2072/222200, Universitat Rovira i Virgili, Department of Economics.
    2. Balatsky, Ye., 2012. "Technological Diffusion and Investment Decision," Journal of the New Economic Association, New Economic Association, vol. 15(3), pages 10-34.
    3. Polterovich, Victor & Popov, Vladimir, 2006. "Stages of Development, Economic Policies and a New World Economic Order," MPRA Paper 20055, University Library of Munich, Germany.
    4. Полтерович В.М., 2009. "Проблема Формирования Национальной Инновационной Системы," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 45(2), апрель.
    5. Verònica Gombau & Agustí Segarra, 2011. "The Innovation and Imitation Dichotomy in Spanish firms: do absorptive capacity and the technological frontier matter?," Working Papers XREAP2011-22, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2011.
    6. Zaytsev, Alexander, 2015. "Производительность Труда В Отраслях Обрабатывающей Промышленности России: Динамика И Межстрановые Сопоставления
      [Labor productivity in Russian manufacturing industries: dynamics and international c
      ," MPRA Paper 68407, University Library of Munich, Germany.
    7. Vladimir Komarov, 2012. "Main Principles of Innovation Theory," Published Papers 173, Gaidar Institute for Economic Policy, revised 2013.

    More about this item

    Keywords

    innovation; imitation; institutional quality;

    JEL classification:

    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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