7 We present a model of structural change due to non-linear Engel-curves for consumer 8 goods. Goods are sequentially introduced starting out as a luxury with high income 9 elasticity and ending up as a necessity with low income elasticity. Although this leads to 10 rising and falling sectoral employment shares, the model exhibits a steady growth path 11 along which the Kaldor facts are satisfi...

The monopolist’s incentives towards product and process innovations are evaluated against the social optimum. The main ...ndings are that (i) the incentive to invest in cost-reducing R&D is inversely related to the number of varieties being supplied at equilibrium, under both regimes; (ii) distortions obtain under monopoly, w.r.t. both the number of varieties and the technology. With substitute...

This study explores the impact of social capital on innovation by constructing a more general measure of social capital indicator consisting of generalized and institutional trust, associational activities and civic norms. We test the hypothesis that social capital has a positive impact on innovation at the national level. After controlling for R&D expenditure and human capital there is a posit...

This paper considers the effect of different firm leadership on the innovative performance of firms from seven EU countries. We investigate whether owner-led or manager-led firms achieve a larger share of their turnover with product innovations. Economic theory does not propose clear answers to this question. In the empirical analysis, it turns out that the manager-led firms are more active inn...

Japan’s hybrid system during the Meiji era of technological modernization provides a useful laboratory for examining whether complementary mechanisms to patents induce innovation. Patents were introduced in 1885 and by 1911 1.2 million mostly non-pecuniary prizes were awarded at 8,503 competitions. Prizes increased patent outcomes by 35 percent, a conservative causal estimate based on the timin...

Innovation is typically a trial-and-error process. While some research paths lead to the innovation sought, others result in dead ends. Because firms benefit from their competitors working in the wrong direction, they do not reveal their negative findings. Hence, time and resources are wasted on dead-end projects. We offer a model to study this prevalent problem and characterize the equilibrium...

We model a symmetric duopoly where ...rms choose whether to be quantity setters or price setters by deciding the optimal capacity; undertake R&D activity to determine the degree of di¤erentiation; and ...nally compete in the market. Two games are proposed, where investment decisions follow di¤erent sequences. We assess price and quantity decisions, ...nding a set of equilibria where the choice ...

We examine the geographic co-location of university research and industrial R&D in three technology areas. While we find strong evidence of co-location of these vertically connected activities, regional economies appear to vary markedly in their ability to convert local academic research into local commercial innovation. We develop and test the hypothesis that the presence of a large, local, R&...

Foreign direct investment (FDI) can benefit innovation activity in the host country via spillover channels such as reverse engineering, skilled labor turnovers, demonstration effects, and supplier– customer relationships. Using provincial data from 1995 to 2000, we find positive effects of FDI on the number of domestic patent applications in China. This finding is robust under both pooled times...

We extend a well known differential oligopoly game to encompass the possibility for production to generate a negative environmental externality, regulated through Pigouvian taxation and price caps. We show that, if the price cap is set so as to fix the tolerable maximum amount of emissions, the resulting equilibrium investment in green R&D is indeed concave in the structure of the industry. Our...