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Growth through Heterogeneous Innovations

Ufuk Akcigit () and William Kerr ()

No 11660, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We build a tractable growth model where multi-product 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. This framework allows us to analyze how different types of innovation contribute to economic growth and how the firm size distribution can have important consequences for the types of innovations realized. Our model aligns with many observed empirical regularities, and we quantify our framework by matching Census Bureau operating data with patent data for U.S. firms. We observe that internal innovation scales moderately faster with firm size than external innovation.

Keywords: Citations; Endogenous Growth; Entrepreneurs.; External; innovation; Internal; patents; Research and Development; Scientists (search for similar items in EconPapers)
JEL-codes: L16 O31 O33 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent, nep-gro, nep-ino, nep-ipr, nep-knm, nep-sbm and nep-tid
Date: 2016-11
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Working Paper: Growth through heterogeneous innovations (2013) Downloads
Working Paper: Growth Through Heterogeneous Innovations (2012) Downloads
Working Paper: Growth Through Heterogeneous Innovations (2010) Downloads
Working Paper: Growth through Heterogeneous Innovations (2010) Downloads
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