GROWTH AND FIRM DYNAMICS WITH HORIZONTAL AND VERTICAL R&amp;D

Gil, Pedro Mazeda; Brito, Paulo; Afonso, Óscar

doi:10.1017/s1365100512000181

Cited by 23 publications

(27 citation statements)

References 39 publications

(52 reference statements)

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“…Stokey (1988) and Aghion and Howitt (1992) build endogenous growth models to shed light on the importance of firms' R&D in an economy's performance, when innovation takes the form of higher-quality products. Peretto (1998Peretto ( , 1999 and Gil et al (2013) endogenise the market structure by considering both variety-expanded and quality-improved R&D. Their purposes are different from ours. These conventional quality-ladder models focus exclusively on vertical R&D activities, taking the number of product varieties as exogenously given.…”

Section: Related Literaturementioning

confidence: 97%

“…These conventional quality-ladder models focus exclusively on vertical R&D activities, taking the number of product varieties as exogenously given. Peretto (1998Peretto ( , 1999 and Gil et al (2013) endogenise the market structure by considering both variety-expanded and quality-improved R&D. Their purposes are different from ours. While their studies attempt to match industrial organisation facts and to be immune from the empirically implausible scale effect, our purpose is to look into how the quality of intermediate goods interacts with the quantity of final goods and how this interaction governs economic growth and social welfare.…”

Section: Related Literaturementioning

confidence: 97%

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The Quality of Intermediate Goods: Growth and Welfare Implications

Cheng

Chang

2017

Economic Record

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TaiwanThis paper explores the implications of the quality of intermediate goods in an endogenous growth model. We show that a trade-off exists between the quality and the variety of products, which creates a wedge between the market-equilibrium quality and the socially optimal quality. Relative to the social optimum, the equilibrium quality could be either under-supplied or over-supplied, depending on the productivity-enhancing effect as well as the increasing returns to production specialisation and business-stealing effects. ) estimates an annual quality growth for durables of about 5 per cent since 1988.The importance of quality growth as a component of GDP growth seems to have increased over time. 2 It was shown using the EU KLEMS Database in 2007 that during the period 1970-2004 this share lay between 0.4 and 0.6

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Section: Related Literaturementioning

confidence: 97%

Section: Related Literaturementioning

confidence: 97%

The Quality of Intermediate Goods: Growth and Welfare Implications

Cheng

Chang

2017

Economic Record

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“…We consider an R&D specication, as proposed by Gil, Brito, and Afonso (2013), that implies that the choice between vertical and horizontal innovation is related to the splitting of R&D expenditures, which are fully endogenous. Thus, we endogenise the rate of both intensive and extensive growth, and thereby production and the number of rms in each sector.…”

Section: Introductionmentioning

confidence: 99%

A Note on Skill-Structure Shocks, the Share of the High-Tech Sector, and Economic Growth Dynamics

2016

Self Cite

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By means of an endogenous growth model of directed technical change with vertical and horizontal R&D, we study a transitional-dynamics mechanism that is consistent with the changes in the shares of the high- versus the low-tech sectors found in recent European data. Under the hypothesis of a positive shock in the proportion of high-skilled labor, the technological-knowledge bias channel leads to unbalanced sectoral growth with a noticeable shift of resources across sectors. A calibration exercise suggests that the model is able to account for up to from 50 to about 100 percent of the increase in the share of the high-tech sector observed in the data from 1995 to 2007. However, the model predicts that the dynamics of the share of the high-tech sector has no significant impact on the dynamics of the economic growth rate.

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“…3 Other macroeconomic analyses that explicitly account for entry dynamics are, among others, those by Gil et al (2013); Zeng (2013); and Sanders (2013).…”

Section: Introductionmentioning

confidence: 99%

Endogenous Market Structure, Occupational Choice, and Growth Cycles

Varvarigos

Gil‐Moltó

2014

Macroecon. Dynam.

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We model an industry that supplies intermediate goods in a growing economy. Agents can choose whether to provide labour or to become firm owners and compete in the industry.The idea that entry is determined through occupational choice has major implications for the economy's dynamics. Particularly, the results show that economic dynamics are governed by endogenous volatility in the determination of both the number of industry entrants and in the growth rate of output. Consequently, we argue that occupational choice and the structural characteristics of the endogenous market structure can act as both the impulse source and the propagation mechanism of economic fluctuations.

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GROWTH AND FIRM DYNAMICS WITH HORIZONTAL AND VERTICAL R&D

Cited by 23 publications

References 39 publications

The Quality of Intermediate Goods: Growth and Welfare Implications

The Quality of Intermediate Goods: Growth and Welfare Implications

A Note on Skill-Structure Shocks, the Share of the High-Tech Sector, and Economic Growth Dynamics

Endogenous Market Structure, Occupational Choice, and Growth Cycles

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