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| Author: | Grossman, G. M. Helpman, E. |
| Title: | Endogenous product cycles |
| Journal: | Economic Journal
1991 : SEP, VOL. 101:408, p. 1224-1229 |
| Index terms: | PRODUCT LIFE CYCLE INDUSTRIAL DEVELOPMENT DEVELOPING COUNTRIES TECHNOLOGY TRANSFER INNOVATION PROFIT OLIGOPOLY |
| Language: | eng |
| Abstract: | The product cycle features prominently in the trade between the Northern developed economies and the Southern newly industrializing economies. In this paper a model is constructed of the product cycle featuring endogenous technology transfer and endogenous innovation. In the model, competitive entrepreneurs in the North expand resources to bring out new products whenever the expected present discounted value of subsuquent oligopoly profits exceeds current product development costs. Each Northern oligopolist continously faces the risk that its product will be copied by a Southern imitator, at which time its profit stream comes to an end. The model of the product cycle is developed and policy analysis is presented. |
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