Autore
Aghion, Philippe

Titolo
Rationalizing Scherer's prophecy of an inverted-U relationship between competition and innovation
Periodico
Economia e politica industriale
Anno: 2014 - Volume: 41 - Fascicolo: 1 - Pagina iniziale: 13 - Pagina finale: 23

In this paper we develop a simple Schumpeterian growth model to rationalize the inverted-U relationship between competition and innovation uncovered by Scherer (1967). This model in turn delivers a number of testable prediction. A first testable prediction is that the relationship between competition and innovation follows an inverted- U pattern and the average technological gap within a sector increases with competition. A second prediction is that more intense competition enhances innovation in "frontier" firms but may discourage it in "non-frontier" firms. A third prediction is that there is complementarity between patent protection and product market competition in fostering innovation. More generally, recent attempts at verifying Scherer’s conjectures have given rise to a whole new trend of endogenous growth models aimed at being confronted with micro evidence.



SICI: 0391-2078(2014)41:1<13:RSPOAI>2.0.ZU;2-V
Testo completo: http://www.francoangeli.it/riviste/Scheda_Rivista.aspx?IDArticolo=50713&Tipo=Articolo PDF

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