TY - UNPB

T1 - Variety Expansion Redux: A Cross-Country Estimation of the Spillover Effects of Innovation and Imitation

AU - Lim, King Yoong

AU - Raza, Ali

PY - 2017/11

Y1 - 2017/11

N2 - The complex interactions between imitation and innovation are frequentlyexamined in endogenous growth models: imitation serves as a stepping stone toinnovation; innovation exhibits spillover to imitation; for both, the accumulativestock provides a standing-on-shoulders e¤ect to further growth. However, empirical estimation of these concepts in true Romerian product variety interpretation is scarce. This is due to variety expansion often being treated only as imitative activities in the relatively popular Schumpeterian interpretation to innovation. Using an overlapping generations framework that models innovation and imitation as semi-symmetric ideas production functions, this paper estimates these spillover e¤ects using cross-country data by treating each 4-digit ISIC industries as a separate industrial variety. We find robust and significant estimates for all three spillover effects, with both imitation and innovation being complementary to each other. In addition, the growth regressions also reaffirm the significance of product variety expansion as a source of innovation-driven growth.

AB - The complex interactions between imitation and innovation are frequentlyexamined in endogenous growth models: imitation serves as a stepping stone toinnovation; innovation exhibits spillover to imitation; for both, the accumulativestock provides a standing-on-shoulders e¤ect to further growth. However, empirical estimation of these concepts in true Romerian product variety interpretation is scarce. This is due to variety expansion often being treated only as imitative activities in the relatively popular Schumpeterian interpretation to innovation. Using an overlapping generations framework that models innovation and imitation as semi-symmetric ideas production functions, this paper estimates these spillover e¤ects using cross-country data by treating each 4-digit ISIC industries as a separate industrial variety. We find robust and significant estimates for all three spillover effects, with both imitation and innovation being complementary to each other. In addition, the growth regressions also reaffirm the significance of product variety expansion as a source of innovation-driven growth.

KW - Growth

KW - Ideas Production

KW - Imitation

KW - Innovation

KW - Product Variety Expansion

M3 - Working paper

T3 - Economics Working Paper Series

BT - Variety Expansion Redux: A Cross-Country Estimation of the Spillover Effects of Innovation and Imitation

PB - Lancaster University, Department of Economics

CY - Lancaster

ER -