GROWTH AND FIRM DYNAMICS WITH HORIZONTAL AND VERTICAL R&D

• Type: Article in International Scientific Journal
• Date: 2013

Authors

gil, pm (Author) FEP; brito, p (Author) Other; afonso, o (Author) FEP

Journal

Title: Macroeconomic Dynamics

Vol. 17

Pages: 1438-1466

ISSN: 1365-1005

Publisher: Cambridge University Press

Indexing

ISI Web of Knowledge - 19 Citations

Scopus - 20 Citations

Scientific classification

FOS: Social sciences > Economics and Business

Other information

Authenticus ID: P-006-70A

DOI: 10.1017/s1365100512000181

Abstract (EN): A negative or nonsignificant empirical correlation between aggregate R&D intensity and the economic growth rate is a well-known fact in the empirical growth literature, but scarcely addressed in the theoretical growth literature. This paper develops an endogenous-growth model that explores the interrelation between horizontal and vertical R&D under a lab-equipment specification that is consistent with that stylized fact. A key feature is that the growth rate is fully endogenous both on the intensive and on the extensive margin. Strong composition effects between horizontal and vertical R&D, along both transition and the balanced-growth path, then emerge as the main mechanism producing those results. This setting also allows us to obtain a relationship between economic growth and firm dynamics that is consistent with the empirical facts.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 29