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78 Innovation , Imitation , Growth , and Capital Market Imperfections *
| Content Provider | Semantic Scholar |
|---|---|
| Author | Palokangas, Tapio |
| Copyright Year | 2005 |
| Abstract | This paper analyzes the interaction of innovation and imitation in a growing economy. It is assumed that because firms cannot use their innovations or imitations as collateral, they finance R&D by issuing shares to the households. The main results are the following. When the mark-ups are close to uniform in all industries, a small subsidy to imitative R&D, a uniform subsidy to all R&D and the decrease in product market competition (PMC) are growth enhancing. In the first-best social optimum, PMC is welfare diminishing. If the government uses the uniform subsidy to all R&D optimally, then there is an "inverted-U" relationship between PMC and social welfare. JEL Classification: L11, L16, O31, O34 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://helda.helsinki.fi/bitstream/handle/10138/16604/innovati.pdf;sequence=1 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |