Innovating Firms and Aggregate Innovation

Tor Klette and Samuel Kortum

No 02/2002, Memorandum from Oslo University, Department of Economics

Abstract: De develop a parsimonious model of innovating firms rich enough to confront firm-level evidence. It captures the dynamic behavior of individual heterogeneous firms, describes the evolution of an industry with simultaneous entry and exit, and delivers a general equilibrium model of technological change. While unifying the theoretical analysis of firms, industries, and the aggregate economy, the models yields insight into empirical work on innovating firms. It accounts for the persistence over time of firms’ R & D investments, the concentration of R & D among incumbents firms, and the link between R & D and patenting . Furthermore, it explains why R & D as a fraction of revenues is strongly related to firm productivity yet largely unrelated to firm size or growth.

Keywords: R&D; firm growth; productivity; market structure; endogeneous growth theory; birth and death processes (search for similar items in EconPapers)
JEL-codes: L11 O31 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2002-02-15
References: View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Forthcoming in Journal of Political Economy, pages 2004.

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Related works:
Journal Article: Innovating Firms and Aggregate Innovation (2004)
Working Paper: Innovating Firms and Aggregate Innovation (2002)
Working Paper: Innovating firms and aggregate innovation (2002)
Working Paper: Innovating Firms and Aggregate Innovation (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:osloec:2002_002

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