Competition and Growth: Reinterpreting their Relationship

Daria Onori

Manchester School, 2015, vol. 83, issue 4, 398-422

Abstract: type="main">

In this paper we modify a standard quality ladder model by assuming that the winners of the R&D race sell licenses over their to the intermediate good firms. These ones compete à la Cournot and it is assumed that there are positive spillovers on costs: in-house and rivals' experience reduces firms' cost. We prove that there exists an interval of values of the spillover parameter such that the relationship between competition and growth is an inverted U shape. In this interval, overall welfare is inverted U-shaped in competition for lower values of the externality parameter and increasing for higher values.

Date: 2015
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Related works:
Working Paper: Competition and Growth: Reinterpreting their Relationship (2013)
Working Paper: Competition and Growth: Reinterpreting their Relationship (2013)
Working Paper: Competition and growth: reinterpreting their relationship (2010)
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