SCHUMPETERIAN GROWTH THEORY: EMPIRICAL TESTING OF BARRIERS TO COMPETITION-PROXIMITY TO FRONTIER ALGORITHM

Predrag Petrović and Goran Nikolić

Economic Annals, 2018, vol. 63, issue 217, 7 - 38

Abstract: This study is dedicated to empirical testing of barriers to competition effect on productivity growth, taking into account the hypothesis that different policies improve economic growth in countries at different levels of technological development. The results of econometric analysis of two panel data sets comprising 144 countries (not controlled for education) and 128 countries (controlled for education) have demonstrated that when approaching the technology frontier, countries with high barriers to competition lose their productivity growth much faster than countries with a low barrier, which is the direct result of the decreasing but positive influence of barriers to competition on productivity growth, regardless of whether the economy is underdeveloped or advanced. This positive effect of barriers can be rationalized by Romer’s (1990) product variety model; or possibly by the inverted-U pattern between competition and innovation proved by Aghion et al. (2005), under the assumption that these sample countries are on the downward slope. Finally, the positive effect of barriers, irrespective of the degree of the countries’ technological development, implies that the theory is not completely consistent with empirical data.

Keywords: Schumpeterian growth theory; productivity growth; barriers to competition; proximity to frontier; technology frontier; education (search for similar items in EconPapers)
JEL-codes: C23 C26 O47 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ekof.bg.ac.rs/wp-content/uploads/2014/04/529.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:beo:journl:v:63:y:2018:i:217:p:7-38

Ordering information: This journal article can be ordered from
http://ea.ekof.bg.ac.rs/

Access Statistics for this article

Economic Annals is currently edited by Will Bartlett

More articles in Economic Annals from Faculty of Economics and Business, University of Belgrade Contact information at EDIRC.
Bibliographic data for series maintained by Goran Petrić ().