Header

UZH-Logo

Maintenance Infos

Competing engines of growth: Innovation and standardization


Acemoglu, Daron; Gancia, Gino; Zilibotti, Fabrizio (2012). Competing engines of growth: Innovation and standardization. Journal of Economic Theory, 147(2):570-601.

Abstract

We study a dynamic general equilibrium model where innovation takes theform of the introduction of new goods whose production requires skilled workers.Innovation is followed by a costly process of standardization, whereby these newgoods are adapted to be produced using unskilled labor. Our framework highlightsa number of novel results. First, standardization is both an engine of growth anda potential barrier to it. As a result, growth is an inverse U-shaped function ofthe standardization rate (and of competition). Second, we characterize the growthand welfare maximizing speed of standardization. We show how optimal protec-tion of intellectual property rights a¤ecting the cost of standardization vary withthe skill-endowment, the elasticity of substitution between goods and other para-meters. Third, we show that, depending on how competition between innovatingand standardizing ?rms is modelled and on parameter values, a new type of multi-plicity of equilibria may arise. Finally, we study the implications of our model forthe skill-premium and we illustrate novel reasons for linking North-South trade tointellectual property rights protection.

Abstract

We study a dynamic general equilibrium model where innovation takes theform of the introduction of new goods whose production requires skilled workers.Innovation is followed by a costly process of standardization, whereby these newgoods are adapted to be produced using unskilled labor. Our framework highlightsa number of novel results. First, standardization is both an engine of growth anda potential barrier to it. As a result, growth is an inverse U-shaped function ofthe standardization rate (and of competition). Second, we characterize the growthand welfare maximizing speed of standardization. We show how optimal protec-tion of intellectual property rights a¤ecting the cost of standardization vary withthe skill-endowment, the elasticity of substitution between goods and other para-meters. Third, we show that, depending on how competition between innovatingand standardizing ?rms is modelled and on parameter values, a new type of multi-plicity of equilibria may arise. Finally, we study the implications of our model forthe skill-premium and we illustrate novel reasons for linking North-South trade tointellectual property rights protection.

Statistics

Citations

Dimensions.ai Metrics
32 citations in Web of Science®
37 citations in Scopus®
132 citations in Microsoft Academic
Google Scholar™

Altmetrics

Downloads

34 downloads since deposited on 10 May 2012
1 download since 12 months
Detailed statistics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:1 March 2012
Deposited On:10 May 2012 09:02
Last Modified:16 Feb 2018 23:29
Publisher:Academic Press
ISSN:0022-0531
OA Status:Closed
Publisher DOI:https://doi.org/10.1016/j.jet.2010.09.001
Related URLs:http://www.zora.uzh.ch/51742/
Other Identification Number:merlin-id:6981

Download