Growth through Heterogeneous Innovations

Ufuk Akcigit and William Kerr

Journal of Political Economy, 2018, vol. 126, issue 4, 1374 - 1443

Abstract: We build a tractable growth model in which multiproduct incumbents invest in internal innovations to improve their existing products, while new entrants and incumbents invest in external innovations to acquire new product lines. External and internal innovations generate heterogeneous innovation qualities, and firm size affects innovation incentives. We analyze how different types of innovation contribute to economic growth and the role of the firm size distribution. Our model aligns with many observed empirical regularities, and we quantify our framework with Census Bureau and patent data for US firms. Internal innovation scales moderately faster with firm size than external innovation.

Date: 2018
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Citations: View citations in EconPapers (219)

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Related works:
Working Paper: Growth through Heterogeneous Innovations (2016)
Working Paper: Growth through heterogeneous innovations (2013)
Working Paper: Growth Through Heterogeneous Innovations (2012)
Working Paper: Growth Through Heterogeneous Innovations (2010)
Working Paper: Growth through Heterogeneous Innovations (2010)
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