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Perpetual leapfrogging in international competition

Yuichi Furukawa

MPRA Paper from University Library of Munich, Germany

Abstract: Technological leadership has shifted at various times from one country to another. This analysis proposes a mechanism that endogenously explains this perpetual cycle of technological leapfrogging by incorporating international knowledge spillovers into a two-country dynamic model of innovation with the dynamic optimization of an infinitely-lived consumer. In the model, innovation productivity in each country endogenously increases over time because of domestic learning-by-doing and learning from foreign capital. The analysis shows that if international spillovers through learning from foreign capital are sufficiently large, technological leadership may first shift from one country to another, and then perpetually alternate between the two countries.

Keywords: Perpetual leapfrogging; innovation; spillovers (search for similar items in EconPapers)
JEL-codes: E32 F12 F43 O41 (search for similar items in EconPapers)
Date: 2012-06, Revised 2012-07
New Economics Papers: this item is included in nep-com, nep-ino, nep-int, nep-knm and nep-mac
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