International Rivalry in Advancing Products

Amy Glass ()

Review of International Economics, 1998, vol. 6, issue 2, 252-65

Abstract: This paper explores the forces that determine the distribution of technological leadership across countries and whether technological leadership contributes to national welfare. Increased domestic resources or domestic innovation efficiency need not improve domestic technological leadership when more than one quality level of a product sells in equilibrium. If and only if a sufficient share of income is spent on high quality levels does increased domestic resources or domestic innovation efficiency improve domestic technological leadership. When discounting is slight enough, forces that improve domestic technological leadership reduce welfare by reducing the rate of innovation. Copyright 1998 by Blackwell Publishing Ltd.

Date: 1998
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