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| Author: | Sorger, G. |
| Title: | Horizontal innovations with endogenous quality choice |
| Journal: | Economica
2011 : OCT, VOL 78: 312 p. 697-722 |
| Index terms: | product design new products technological innovation R&D growth models |
| Language: | eng |
| Abstract: | We discuss a growth model with horizontal innovations but propose that researchers can determine the quality of their product designs. The effort needed to create a new product design increases with its quality and thus there is a trade-off between the quantity and quality of innovations. We consider the implications of the trade-off for the relative inputs of quality improvement and variety expansion to productivity growth. Because of the quality/quantity trade-off of research and development, the resolution of the scale effects problem does not lead to the policy invariance of the growth rate. |
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