Competition, Imitation and Growth with Step-by-Step Innovation Export

@article{citeulike:2951349, abstract = {Is more intense product market competition and imitation good or bad for growth? This question is addressed in the context of an endogenous growth model with "step-by-step" innovations, in which technological laggards must first catch up with the leading-edge technology before battling for technological leadership in the future. In contrast to earlier Schumpeterian models in which innovations are always made by outsider firms who earn no rents if they fail to innovate and become monopolies if they do innovate, here we find: first, that the usual Schumpeterian effect of more intense product market competition (PMC) is almost always outweighed by the increased incentive for firms to innovate in order to escape competition, so that PMC has a positive effect on growth; second, that a little imitation is almost always growth-enhancing, as it promotes more frequent neck-and-neck competition, but too much imitation is unambiguously growth-reducing. The model thus points to complementary roles for competition (anti-trust) policy and patent policy.}, author = {Aghion, Philippe and Harris, Christopher and Howitt, Peter and Vickers, John}, citeulike-article-id = {2951349}, citeulike-linkout-0 = {http://dx.doi.org/10.2307/2695893}, citeulike-linkout-1 = {http://www.jstor.org/stable/2695893}, doi = {10.2307/2695893}, journal = {The Review of Economic Studies}, keywords = {competition, economic\_growth}, number = {3}, pages = {467--492}, posted-at = {2008-07-02 07:49:19}, priority = {3}, publisher = {The Review of Economic Studies Ltd.}, title = {Competition, Imitation and Growth with Step-by-Step Innovation}, url = {http://dx.doi.org/10.2307/2695893}, volume = {68}, year = {2001} }

TY - JOUR ID - citeulike:2951349 L3 - citeulike-article-id:2951349 N2 - Is more intense product market competition and imitation good or bad for growth? This question is addressed in the context of an endogenous growth model with "step-by-step" innovations, in which technological laggards must first catch up with the leading-edge technology before battling for technological leadership in the future. In contrast to earlier Schumpeterian models in which innovations are always made by outsider firms who earn no rents if they fail to innovate and become monopolies if they do innovate, here we find: first, that the usual Schumpeterian effect of more intense product market competition (PMC) is almost always outweighed by the increased incentive for firms to innovate in order to escape competition, so that PMC has a positive effect on growth; second, that a little imitation is almost always growth-enhancing, as it promotes more frequent neck-and-neck competition, but too much imitation is unambiguously growth-reducing. The model thus points to complementary roles for competition (anti-trust) policy and patent policy. IS - 3 JF - The Review of Economic Studies EP - 492 TI - Competition, Imitation and Growth with Step-by-Step Innovation PB - The Review of Economic Studies Ltd. VL - 68 SP - 467 KW - competition KW - economic_growth AU - Aghion, Philippe AU - Harris, Christopher AU - Howitt, Peter AU - Vickers, John PY - 2001/// UR - http://dx.doi.org/10.2307/2695893 ER -