How much horizontal innovation is consistent with vertical innovation?
Journal
Research in Economics
ISSN
1090-9443
ISSN-Digital
1090-9451
Type
journal article
Date Issued
2006-03-01
Author(s)
Abstract
R&D-driven growth theory emphasizes vertical and horizontal innovation activities for long run growth. In this paper, we show that the real world co-existence of both innovative activities restricts the admissible laws of motion for horizontal innovation, thereby allowing to test the admissible range of intertemporal horizontal R&D spillovers. Private arbitrage between manufacturing and vertically innovating makes quality improving R&D profitable if and only if the horizontal innovation rate does not exceed the population growth rate. Hence, the mere observation of positive vertical innovation suggests that the number of new sectors has not been increasing faster than population.
Language
English
Keywords
Schumpeterian growth theory
horizontal and vertical innovation
scale effects
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Responsible Corporate Competitiveness (RoCC)
Refereed
Yes
Publisher
Elsevier Science
Publisher place
Amsterdam
Volume
60
Number
1
Start page
47
End page
53
Pages
7
Subject(s)
Eprints ID
222073