The influence of the intensity of competition in the product market on economic growth is analyzed by developing an endogenous growth model with horizontal innovation. Product market competition is measured by (1-Lerner index) and depends on both the share of factor inputs in total income and the degree of substitutability across goods. We find that the shape of the relationship between competition and growth can change dramatically according to which proxy of competition is used. We explain our results in terms of the interplay between the resource allocation and the profit incentive effects. (c) 2008 Elsevier B.V. All rights reserved.
Horizontal innovation-based growth and product market competition / Alberto, Bucci; Parello, Carmelo Pierpaolo. - In: ECONOMIC MODELLING. - ISSN 0264-9993. - ELETTRONICO. - 26:1(2009), pp. 213-221. [10.1016/j.econmod.2008.06.010]
Horizontal innovation-based growth and product market competition
PARELLO, Carmelo Pierpaolo
2009
Abstract
The influence of the intensity of competition in the product market on economic growth is analyzed by developing an endogenous growth model with horizontal innovation. Product market competition is measured by (1-Lerner index) and depends on both the share of factor inputs in total income and the degree of substitutability across goods. We find that the shape of the relationship between competition and growth can change dramatically according to which proxy of competition is used. We explain our results in terms of the interplay between the resource allocation and the profit incentive effects. (c) 2008 Elsevier B.V. All rights reserved.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.