Human capital, product market power and economic growth

Alberto Bucci ()

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: We build a generalised growth model of horizontal product innovation with human capital accumulation in which the monopolistic mark-up set in the uncompetitive sector and the degree of returns to specialization are disentangled. We find that product market power has a positive growth effect when durables are employed in the production of the homogeneous consumers good. Thus, in this case the model allows to replicate one of the main results of the neo-Schumpeterian growth theory within a framework where innovation is both horizontal and deterministic and economic growth is driven by private incentives to invest in education. We also find that not only the type of technology employed in the final output production, but also the intensity of the inter-sectoral competition for the same resource (human capital) affect both the steady state level of growth and the relationship between market power and economic development.

Keywords: Human Capital; R&D; Product Market Power; Endogenous Growth (search for similar items in EconPapers)
JEL-codes: J24 O31 O41 (search for similar items in EconPapers)
Date: 2004-01-01
New Economics Papers: this item is included in nep-dev and nep-lab
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Chapter: Human capital, product market power and economic growth (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2004-21

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