Horizontal Innovation-Based Growth and Product Market Competition
Alberto Bucci () and
Carmelo Parello ()
No unimi-1032, UNIMI - Research Papers in Economics, Business, and Statistics from Universitá degli Studi di Milano
The influence of the degree of competition in the goods market on growth is analyzed by developing an endogenous growth model with horizontal innovation. Product market competition is measured by (1- Lerner index) and depends on both the share of factor inputs in total income and on the elasticity of substitution across goods. We find that the shape of the relationship between competition and growth can change dramatically according to which proxy of competition is used. We interpret our results in terms of the interplay between the resource allocation and the profit incentive effects.
Keywords: Innovation; Product Market Competition; Endogenous Growth; Scale Effects (search for similar items in EconPapers)
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Journal Article: Horizontal innovation-based growth and product market competition (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:bep:unimip:unimi-1032
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