Competition and Growth in an Endogenous Growth Model with Expanding Product Variety without Scale Effects

Dominique Bianco

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of this paper is to analyse the relationship between competition and growth in an endogenous growth model with expanding product variety without scale effect. In order to do this, we develop an extension of the Bucci (2005) model in which we eliminate the scale effects. We find that the relationship between competition and growth is always inverted U shaped. We explain this result by the composition of two effects on growth : resource allocation and profit incentive effects. For low values of product market competition, an increase of competition has an positive effect on growth. For large values of competition, we have a negative relationship between competition and growth.

Keywords: Endogenous Growth; Horizontal Differentiation; Technological Change; Imperfect Competition (search for similar items in EconPapers)
JEL-codes: O31 O41 (search for similar items in EconPapers)
Date: 2007-11-10, Revised 2007-12-08
New Economics Papers: this item is included in nep-com, nep-cse and nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://mpra.ub.uni-muenchen.de/6179/1/MPRA_paper_6179.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/9469/1/MPRA_paper_9469.pdf revised version (application/pdf)

Related works:
Journal Article: Competition and growth in endogenous growth model with expanding product variety without scale effects (2006)
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