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Competition, innovation and growth with limited commitment

Ramon Marimon and Vincenzo Quadrini

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We study how barriers to business start-up affect the investment in knowledge capital when contracts are not enforceable. Barriers to business start-up lower the competition for knowledge capital and, in absence of commitment, reduce the incentive to accumulate knowledge. As a result, countries with large barriers experience lower income and growth. Our results are consistent with cross-country evidence showing that the cost of business start-up is negatively correlated with the level and growth of income.

Keywords: Innovation; Knowledge Capital; Enforcement; Growth; Competition; Commitment; Recursive Contracts; Mobility (search for similar items in EconPapers)
JEL-codes: D23 E22 J24 O30 O31 O40 (search for similar items in EconPapers)
Date: 2005-12
New Economics Papers: this item is included in nep-bec, nep-cse, nep-dge, nep-ent and nep-mac
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Competition, Innovation and Growth with Limited Commitment (2006) Downloads
Working Paper: Competition, Innovation and Growth with Limited Commitment (2006) Downloads
Working Paper: Competition, Innovation and Growth with Limited Commitment (2005) Downloads
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