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Monopolistic competition for the market with heterogeneous firms and Schumpeterian growth

Federico Etro ()

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: I study monopolistic competition in patent races where firms are heterogeneous in R&D costs. Only the most efficient firms invest, and they invest more when the value of innovation is higher, while the endogenous set of active firms depends on the profitability of innovation. In particular, selection effect (increasing R&D productivity) emerge after a reduction of the entry cost or after an increase (a reduction) of the value of innovation if the elasticity of the probability of innovation is increasing (decreasing) in investment. In Schumpeterian models selection effects foster endogenous growth.

Keywords: Patent races; heterogeneous firms; monopolistic competition; Schumpeterian growth. (search for similar items in EconPapers)
JEL-codes: L1 O3 O4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-gro, nep-ind, nep-ino, nep-ipr, nep-sbm and nep-tid
Date: 2019
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