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Title:Exploration and exploitation: the role of entrepreneurship and R&D in the process of innovation PDF Logo
Authors:Keilbach, Max
Sanders, Mark
Issue Date:2007
Series/Report no.:Jena economic research papers 2007,108
Abstract:We formulate a model that explicitly separates two functions in the innovation process: The introduction of new goods and the quality improvement of existing goods. While the latter is performed by the corporate R&D sector, the first is performed by entrepreneurs. We show that in a three sector economy, which also includes a producing sector, there exists a stable non trivial allocation of labor to production, innovation and entrepreneurship. We compute the steady state allocation of labor to production, R&D and Entrepreneurship. We show that the innovation rate decreases if one of the innovative sectors does not exist.
Subjects:Innovation
Variety Expansion
Quality Ladders
Entrepreneurship
R&D Sector
JEL:O31
O41
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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