Leadership cycles

Arbeitspapier

We study a quality-ladder model of endogenous growth that produces stochastic leadership cycles. Over a cycle, industry leaders can innovate several successive times in the same industry, gradually increasing the magnitude of their technological lead before being replaced by a new entrant. Initially, new leaders are eager to enlarge their lead and do much of the research, but if they innovate repeatedly, their propensity to invest in R&D decreases. Eventually they stop doing research altogether, and as they are overtaken a new cycle starts. The model generates a skewed firm size distribution and a deviation from Gibrat's law that accord with the empirical evidence. We also consider various policy measures, showing that in some cases policy should favour R&D by incumbents, not outsiders, and that stronger patent protection may reduce innovation and growth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 2010,35

Classification and Topics

• Classification: Wirtschaft ; Management of Technological Innovation and R&D
• Subject: Technological Lead ; Innovation ; R&D

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Denicolò, Vincenzo ; Zanchettin, Piercarlo
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/43511
• Last update: 10.03.2025, 11:44 AM CET