Growth through heterogeneous innovations
By: Ufuk Akcigit, William R. Kerr
Contributors: Kerr, William R. (William Robert); Harvard Business School
Edition: Revised edition
Series: Working paper / Harvard Business School -- 11-044; Working paper (Harvard Business School) -- 11-044
Publisher: Harvard Business School
Published: 2012
Place of publication: Boston]
Language: eng
Number of pages: 55
Description: We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multi-product firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects.
Notes: Includes bibliographical references (pages 34-38).