Growth through Heterogeneous Innovation, Second Version

Ufuk Akcigit and William Kerr

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: We study how external versus internal innovations promote economic growth through a tractable endogenous growth framework with multiple innovation sizes, multi-product firms, and entry/exit. Firms invest in external R&D to acquire new product lines and in internal R&D to improve their existing product lines. A baseline model derives the theoretical implications of weaker scaling for external R&D versus internal R&D, and the resulting predictions align with observed empirical regularities for innovative firms. Quantifying a generalized model for the recent U.S. economy using matched Census Bureau and patent data, we observe a modest departure for external R&D from perfect scaling frameworks.

Keywords: Endogenous Growth; Innovation; External; Internal; Research and Development; Patents; Citations; Scientists; Entrepreneurs. (search for similar items in EconPapers)
JEL-codes: L16 O31 O33 O41 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2015-03-25, Revised 2015-03-25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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