Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150301
Authors: 
Zilibotti, Fabrizio
König, Michael
Lorenz, Jan
Year of Publication: 
2016
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 11 [Year:] 2016 [Issue:] 3 [Pages:] 1053-1102
Abstract: 
We develop a tractable dynamic model of productivity growth and technology spillovers that is consistent with the emergence of real world empirical productivity distributions. Firms can improve productivity by engaging in in-house R\&D, or alternatively, by trying to imitate other firms' technologies, subject to the limits of their absorptive capacities. The outcome of both strategies is stochastic. The choice between in-house R\&D and imitation is endogenous, and based on firms' profit maximization motive. Firms closer to the technological frontier face fewer imitation opportunities, and choose in-house R\&D, while firms farther from the frontier try to imitate more productive technologies. The equilibrium choice leads to a balanced-growth equilibrium featuring persistent productivity differences even when starting from ex-ante identical firms. The long-run productivity distribution can be described as a traveling wave with tails following a Pareto as can be observed in the empirical data.
Subjects: 
Imitation
innovation
growth
quality ladder
absorptive capacity
productivity differences
spillovers
JEL: 
O40
E10
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Article

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