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Innovation, Market Structure and Economic Growth

Author

Listed:
  • Nuno Pedro Gonçalves Palma

    (Technical University of Lisbon: Faculty of Economics & Management - I.S.E.G.)

Abstract

This paper presents a dynamic partial equilibrium model that endogenizes firms' investment decision on innovation: product innovation causes horizontal expansion growth, and process innovation causes vertical expansion growth. Market structure in different markets emerges as a consequence of different investment on innovation opportunities. Main variables that constrain this structure in a given market are the rate of scientific (basic) discoveries that permit innovation productivity, and the degree of substitution between varieties, together with the possible existence of scope economies.

Suggested Citation

  • Nuno Pedro Gonçalves Palma, 2004. "Innovation, Market Structure and Economic Growth," Industrial Organization 0411007, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpio:0411007
    Note: Type of Document - pdf; pages: 20. comments welcome: nunopedropalma@hotmail.com
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/io/papers/0411/0411007.pdf
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    More about this item

    Keywords

    R&D; Market Structure; Growth.;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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