Competition, Market Selection and Growth

Datos Bibliográficos

ID9706982
AutoresVincenzo Denicolò (0000-0001-8371-4241, University of Bologna), Piercarlo Zanchettin (0000-0003-0559-869X, University of Leicester)
Año2010
Volumen120
Número545
Páginas761-785
Fecha de publicación2010-06-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2009.02313.x
OpenAlexW1493847525
IdiomaEN
Citas recibidas2
Referencias citadas27

We study the effect of the competitive selection process on the economy's rate of growth. In an extension of standard quality-ladder models of endogenous growth, we allow for the possibility that in each period several asymmetric firms (representing an endogenously determined number of past innovators) may be simultaneously active in an industry. Stronger competitive pressure then has conflicting effects on the incentive to innovate, lowering prices but also selecting the more efficient firms. We show that the market selection effect of competition always increases the incentive to innovate and find circumstances in which it can outweigh the traditional negative effect of lower prices. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009

Competition (biology · Economics · Endogenous growth theory · Incentive · Industrial organization · Market economy · Microeconomics · Quality (philosophy · Selection (genetic algorithm · Economic Growth and Productivity · Economic theories and models · Firm Innovation and Growth