Competition, Innovation and Growth with Limited Commitment

Ramon Marimon and Vincenzo Quadrini

No 5840, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study how barriers to competition - such as, restrictions to business start-up and strict enforcement of covenants or IPR - affect the investment in knowledge capital when contracts are not enforceable. These barriers lower the competition for human capital and reduce the incentive to accumulate knowledge. We show in a dynamic general equilibrium model that this mechanism has the potential to account for significant cross-country income inequality.

Keywords: contract enforcement; economic growth; human capital (search for similar items in EconPapers)
JEL-codes: L14 O4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-com, nep-dev, nep-dge and nep-ent
Date: 2006-09
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Working Paper: Competition, Innovation and Growth with Limited Commitment (2006)
Working Paper: Competition, Innovation and Growth with Limited Commitment (2005)
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