Endogenous Growth and Structural Change Through Vertical and Horizontal Innovations

Bondarev, Anton; Greiner, Alfred

doi:10.2139/ssrn.2393435

Cited by 7 publications

(9 citation statements)

References 21 publications

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“…This paper considers that in such an economy endogenous structural change is a source of constant economic growth. Furthermore, the range of existing sectors as well as growth rates remain constant as long as technologies are symmetrical (Bondarev & Greiner, 2017).…”

Section: Review Of Relevant Literaturementioning

confidence: 99%

The importance of technological progress in measuring economic growth in Bosnia and Herzegovina

Hadžić¹

2020

BH Ekonomski forum

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Economic growth is one of the most important concepts in the world economy. Although some authors critically believe that the level and rates of economic growth do not necessarily reflect the actual standard of living, it still remains the main way to measure a country's well-being. Different views on the topic of economic growth, as well as the factors that influence it, have been present throughout the history of economic thought from the very beginning. Unlike many theories of economic growth, which believe that in the long run there will be diminishing returns on factors of production such as labor and capital, Paul Romer in his theory of endogenous growth believes that technological progress, through knowledge accumulation, idea creation and innovation, leads to increasing returns, and thus contributes more to long-term economic growth, unlike other factors. In this paper, on the example of economic growth in B&H, the hypothesis that the activities of knowledge-based services contribute more to the gross domestic product, compared to other sectors was tested. To prove the hypothesis, a multiple linear regression model was made based on a time series of 48 consecutive quarterly values of B&H gross domestic product and sectoral gross value added according to the income and production approach. In the model, activities were grouped into those that are predominantly labor-intensive, knowledge-based services, personal and social services, and other activities. The results showed that the average value of gross value added per worker employed in the sectors of knowledge-based services has a 2.5 higher contribution compared to a worker in the labour-intensive sectors and a 2.47 higher contribution compared to one worker in the personal and social services segment. Also, tests of the implemented model show that additional employment in the sectors of knowledge-based services leads to accelerated economic growth in B&H.

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Section: Review Of Relevant Literaturementioning

confidence: 99%

The importance of technological progress in measuring economic growth in Bosnia and Herzegovina

Hadžić¹

2020

BH Ekonomski forum

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“…The model follows the lines of Belyakov, Tsachev, and Veliov, 8 where the mathematical foundations for this type of models are discussed, but it is more closely to the stylized model in this study 11 and the one in this study. 4 Investments into horizontal and vertical innovations are determined by an intertemporal optimization problem subject to the laws of motion describing the productivity increase for each technology and subject to the process of variety expansion of the technologies. Denoting the discount rate of the firm by r, the objective functional to be maximized can be written as…”

Section: The Intertemporal Optimization Problemmentioning

confidence: 99%

Optimal R&D investment with learning‐by‐doing: Multiple steady states and thresholds

Greiner

Bondarev

2017

Optim Control Appl Methods

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In this paper we present an inter-temporal optimization problem of a representative R&D firm that simultaneously invests in horizontal and vertical innovations. We posit that learning-by-doing makes the process of quality improvements a positive function of the number of existing technologies with the function displaying a convex-concave form. We show that multiple steady-states can arise with two being saddle point stable and one unstable with complex conjugate eigenvalues. Thus, a threshold with respect to the variety of technologies exists that separates the two basins of attractions. From an economic point of view, this implies that a lock-in effect can occur such that it is optimal for the firm to produce only few technologies at a low quality when the initial number of technologies falls short of the threshold. Hence, history matters as concerns the state of development implying that past investments and innovations determine whether the firm produces a large or a small variety of high-or low-quality technologies, respectively.

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“…Every country k ∈ {N, S} is described by the framework with endogenous structural change as in Bondarev and Greiner (2014a) with both vertical and horizontal R&D. We assume symmetric economies with respect to the labour force that is constant over time. In every economy labour equals total population and is distributed across the existing range of sectors at every point in time t: ∀k ∈ {N, S} :…”

Section: The Basic Modelmentioning

confidence: 99%

“…In addition, production goes along with environmental degradation that negatively affects output in both economies. The starting point of our analysis are the two papers by Bondarev and Greiner (2014a) and Bondarev and Greiner (2014b) where the basic model with and without environmental degradation is presented, however, without considering a North-South interaction but restricting itself to the autarky case only.…”

Section: Introductionmentioning

confidence: 99%

A North-South Model with Technological Spillovers, Environmental Degradation and Structural Change

Bondarev

Greiner

2016

Dynamic Modeling, Empirical Macroeconomics, and Finance

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In this paper we present and analyze a stylized model of endogenous growth with international technology spillover effects from the North to the South. The model allows for endogenous structural change and environmental degradation that reduces world output. We find that within this framework the costless technological spillovers foster structural change in both more and less advanced economies. Moreover, we can show that under technological spillovers the degradation of the environment is expected to be lower even without government interventions and we highlight the role of endogenous structural change in generating this outcome.JEL classification: Q55, Q58, O31, O34, O41

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Endogenous Growth and Structural Change Through Vertical and Horizontal Innovations

Cited by 7 publications

References 21 publications

The importance of technological progress in measuring economic growth in Bosnia and Herzegovina

The importance of technological progress in measuring economic growth in Bosnia and Herzegovina

Optimal R&D investment with learning‐by‐doing: Multiple steady states and thresholds

A North-South Model with Technological Spillovers, Environmental Degradation and Structural Change

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