IDEAS home Printed from https://ideas.repec.org/p/ctl/louvir/2002012.html
   My bibliography  Save this paper

Market Power, Human Capital and Growth

Author

Listed:
  • Alberto BUCCI

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

In this paper we study the economic determinants of the inter-sectoral distribution of skilled workers and the long-run consequences of imperfect competition on growth within an R&D-based growth model with human capital accumulation. We find that steady-state growth is driven only by incentives to accumulate human capital and is independent of scale effects. In the model imperfect competition has a positive growth effect, while influencing the allocation of human capital to the diferent economic activities. Contrary to general wisdom, high R&D investment is not always associated with high output growth.

Suggested Citation

  • Alberto BUCCI, 2002. "Market Power, Human Capital and Growth," LIDAM Discussion Papers IRES 2002012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2002012
    as

    Download full text from publisher

    File URL: http://sites.uclouvain.be/econ/DP/IRES/2002-12.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alberto Bucci, 2001. "Horizontal Innovation, Market Power And Growth," International Economic Journal, Taylor & Francis Journals, vol. 17(1), pages 57-82.
    2. Theo S. Eicher, 1996. "Interaction Between Endogenous Human Capital and Technological Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(1), pages 127-144.
    3. Jones, Charles I & Williams, John C, 2000. "Too Much of a Good Thing? The Economics of Investment in R&D," Journal of Economic Growth, Springer, vol. 5(1), pages 65-85, March.
    4. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    5. Aghion, Ph. & Dewatripont, M. & Rey, P., 1997. "Corporate governance, competition policy and industrial policy," European Economic Review, Elsevier, vol. 41(3-5), pages 797-805, April.
    6. Young, Alwyn, 1993. "Invention and Bounded Learning by Doing," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 443-472, June.
    7. Louise Keely, 2001. "Using Patents In Growth Models," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(6), pages 449-492.
    8. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    9. Keely, Louise & Quah, Danny, 1998. "Technology in Growth," CEPR Discussion Papers 1901, C.E.P.R. Discussion Papers.
    10. Gervan Fearon, 1998. "Monitoring Competitive Bidding in the Public Sector," University of Western Ontario, Departmental Research Report Series 9810, University of Western Ontario, Department of Economics.
    11. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589833, November.
    12. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins of Technology-Skill Complementarity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 693-732.
    13. Arnold, Lutz G., 1998. "Growth, Welfare, and Trade in an Integrated Model of Human-Capital Accumulation and Research," Journal of Macroeconomics, Elsevier, vol. 20(1), pages 81-105, January.
    14. Samuel S. Kortum, 1997. "Research, Patenting, and Technological Change," Econometrica, Econometric Society, vol. 65(6), pages 1389-1420, November.
    15. Zvi Griliches, 1998. "The Search for R&D Spillovers," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 251-268 National Bureau of Economic Research, Inc.
    16. Eicher, Theo S & Turnovsky, Stephen J, 1999. "Non-scale Models of Economic Growth," Economic Journal, Royal Economic Society, vol. 109(457), pages 394-415, July.
    17. Peretto, P. & Smulders, J.A., 1998. "Specialization, Knowledge Dilution, and Scale Effects in an IO-Based Growth Model," Other publications TiSEM 167c9440-7cc2-481e-a673-c, Tilburg University, School of Economics and Management.
    18. Aghion, Philippe & Howitt, Peter, 1996. "Research and Development in the Growth Process," Journal of Economic Growth, Springer, vol. 1(1), pages 49-73, March.
    19. Neri Salvadori & Rodolfo Signorino, 2016. "Competition," Chapters, in: Gilbert Faccarello & Heinz D. Kurz (ed.), Handbook on the History of Economic Analysis Volume III, chapter 6, pages 70-81, Edward Elgar Publishing.
      • Salvadori, Neri & Signorino, Rodolfo, 2011. "Competition," MPRA Paper 38387, University Library of Munich, Germany.
    20. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    21. Alberto BUCCI, 2000. "On Scale Effects, Market Power and Growth when Human and Technological Capital are Complements," Working Papers 134, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    22. Benassy, Jean-Pascal, 1998. "Is there always too little research in endogenous growth with expanding product variety?," European Economic Review, Elsevier, vol. 42(1), pages 61-69, January.
    23. Charles I. Jones, 1999. "Growth: With or Without Scale Effects?," American Economic Review, American Economic Association, vol. 89(2), pages 139-144, May.
    24. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 495-525.
    25. Philippe Aghion & Peter Howitt, 1998. "Market Structure and the Growth Process," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 276-305, January.
    26. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589819, November.
    27. Redding, Stephen, 1996. "The Low-Skill, Low-Quality Trap: Strategic Complementarities between Human Capital and R&D," Economic Journal, Royal Economic Society, vol. 106(435), pages 458-470, March.
    28. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    29. Alberto Bucci, 2002. "When Romer meets Lucas: On human capital, imperfect competition and growth," Departmental Working Papers 2002-06, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    30. Bucci, Alberto & Saglam, H.C., 2000. "Growth Maximizing Patent Life-Time," LIDAM Discussion Papers IRES 2000019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    31. Stokey, Nancy L, 1988. "Learning by Doing and the Introduction of New Goods," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 701-717, August.
    32. Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
    33. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
    34. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    35. Pritchett, Lant, 1996. "Where has all the education gone?," Policy Research Working Paper Series 1581, The World Bank.
    36. Blackburn, Keith & Hung, Victor T. Y. & Pozzolo, Alberto F., 2000. "Research, Development and Human Capital Accumulation," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 189-206, April.
    37. Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August.
    38. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589826, November.
    39. Dinopoulos, Elias & Thompson, Peter, 1998. "Schumpeterian Growth without Scale Effects," Journal of Economic Growth, Springer, vol. 3(4), pages 313-335, December.
    40. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    41. Aghion, Philippe & Harris, Christopher & Vickers, John, 1997. "Competition and growth with step-by-step innovation: An example," European Economic Review, Elsevier, vol. 41(3-5), pages 771-782, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alberto Bucci, 2005. "Human capital, product market power and economic growth," Chapters, in: Neri Salvadori & Renato Balducci (ed.), Innovation, Unemployment and Policy in the Theories of Growth and Distribution, chapter 1, Edward Elgar Publishing.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alberto Bucci, 2005. "Human capital, product market power and economic growth," Chapters, in: Neri Salvadori & Renato Balducci (ed.), Innovation, Unemployment and Policy in the Theories of Growth and Distribution, chapter 1, Edward Elgar Publishing.
    2. Alberto Bucci, 2005. "Product Market Competition, R&D Effort and Economic Growth," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1011, Universitá degli Studi di Milano.
    3. Alberto Bucci, 2003. "R&D, Imperfect Competition and Growth with Human Capital Accumulation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 417-439, September.
    4. Alberto Bucci, 2008. "Competition and R&D investment in human capital-driven growth," Politica economica, Società editrice il Mulino, issue 2, pages 235-265.
    5. repec:mul:je8794:doi:10.1429/27918:y:2008:i:2:p:235 is not listed on IDEAS
    6. Boikos, Spyridon & Bucci, Alberto & Stengos, Thanasis, 2022. "Leisure and innovation in horizontal R&D-based growth," Economic Modelling, Elsevier, vol. 107(C).
    7. Stephen J. Turnovsky, 2000. "Growth in an open economy: some recent developments," Working Paper Research 05, National Bank of Belgium.
    8. Benjamin Montmartin & Nadine Massard, 2015. "Is Financial Support For Private R&D Always Justified? A Discussion Based On The Literature On Growth," Journal of Economic Surveys, Wiley Blackwell, vol. 29(3), pages 479-505, July.
    9. Alberto Bucci, 2014. "Population, competition, innovation, and economic growth with and without human capital investment," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(1), pages 61-84, April.
    10. Alberto Bucci, 2005. "An Inverted-U Relationship between Product Market Competition and Growth in an Extended Romerian Model," Rivista di Politica Economica, SIPI Spa, vol. 95(5), pages 177-206, September.
    11. Blackburn, Keith & Hung, Victor T. Y. & Pozzolo, Alberto F., 2000. "Research, Development and Human Capital Accumulation," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 189-206, April.
    12. Frederic Tournemaine & Pongsak Luangaram, 2012. "R&D, human capital, fertility, and growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 923-953, July.
    13. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    14. Grimaud, André & Tournemaine, Frédéric, 2004. "Funding Research and Educating People in a Growth Model with Increasing Population," IDEI Working Papers 262, Institut d'Économie Industrielle (IDEI), Toulouse.
    15. Zeng, Jinli, 2003. "Reexamining the interaction between innovation and capital accumulation," Journal of Macroeconomics, Elsevier, vol. 25(4), pages 541-560, December.
    16. Volker Grossmann & Thomas Steger, 2007. "Growth, Development, and Technological Change," CESifo Working Paper Series 1913, CESifo.
    17. Holger Strulik, 2005. "The Role of Human Capital and Population Growth in R&D‐based Models of Economic Growth," Review of International Economics, Wiley Blackwell, vol. 13(1), pages 129-145, February.
    18. Elie Gray & André Grimaud, 2014. "The Lindahl Equilibrium in Schumpeterian Growth Models: Knowledge Diffusion, Social Value of Innovations and Optimal R&D Incentives," CESifo Working Paper Series 4678, CESifo.
    19. Simon Wiederhold, 2012. "The Role of Public Procurement in Innovation: Theory and Empirical Evidence," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 43.
    20. Christian Groth, 2004. "Innovation and growth: What have we learnt from the robustness debate?," Discussion Papers 04-29, University of Copenhagen. Department of Economics, revised Nov 2004.
    21. Alberto Bucci & Fabio Fiorillo & Stefano Staffolani, 2003. "Can Market Power Influence Employment, Wage Inequality and Growth?," Metroeconomica, Wiley Blackwell, vol. 54(2‐3), pages 129-160, May.

    More about this item

    Keywords

    Endogenous Growth; Human Capital; R&D;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctl:louvir:2002012. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Virginie LEBLANC (email available below). General contact details of provider: https://edirc.repec.org/data/iruclbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.