| Author: | Aghion, P. |
| Title: | Competition, Imitation and Growth with Step-by-Step Innovation |
| Journal: | Review of Economic Studies
2001 : VOL. 68(3):236, p. 467-492 |
| Index terms: | COMPETITION GROWTH INNOVATION |
| Language: | eng |
| Abstract: | The authors answer the question whether is more intense product market competition and imitation good or bad for growth. In contrast to earlier Schumpeterian models in which innovations are always made by outsider firms who earn no rents if they fail to innovate and become monopolies if they do innovate, here the authors find: first that the usual Schumpeterian effect of more intense product market competition (PMC) is almost always outweighed by the increased incentive for firms to innovate in order to escape competition, so that PMC has a positive effect on growth; second, that a little imitation is almost always growth-enhancing, as it promotes more frequent neck-and- neck competition, but too much imitation is unambiguously growth-reducing. |
SCIMA