Market Power and Growth in a Schumpeterian Framework of Innovation

Can market power really be considered as "the price" that a society as a whole is called to pay in order to have a more dynamically efficient economic system? The schumpeterian answer to this question would be certainly positive, the monopoly power being seen as the reward accruing to the successful innovator from his/her innovative activity. However, the idea to consider the existence of any possible positive linkage among market power, innovation and growth is not unambiguously present in the so-called deterministic, neo-schumpeterian, R&D-based growth models. On the basis of such very general considerations, in this paper we build two different models, sharing the same theoretical framework suggested by P. Romer (1990). What results from the analysis is that in the more familiar models of innovation and economic development, the relationship between some measure of market power and aggregate growth rate is not robust at all, depending on variables such as the kind of inputs each industry employs in order to obtain its own output and the way in which these inputs are combined. This is particularly relevant in terms of public policies towards the intermediate monopolies, suggesting the necessity for a growth-maximising regulator to assess case-by-case the type of his/her intervention.Monopoly Power; Technological Change; Economic Growth; Antitrust Policy

Product Market Competition, R&D Effort and Economic Growth

Empirical evidence has recently pointed to the lack of any relationship between R&D intensity (variously defined and measured) and economic growth in the post-war period in the United States and other OECD countries. Using a framework that integrates human capital accumulation and purposive (horizontal) innovation activity, this paper looks at product market competition as a possible solution to this puzzle. Indeed, we find that changes in product market competition may well have no influence on human capital investment (the growth engine), while affecting R&D effort.Endogenous Growth; R&D Investment; Human Capital Accumulation; Product Market Competition

Market Power, Human Capital and Growth

In this paper we study the economic determinants of the inter-sectoral distribution of skilled workers and the long-run consequences of imperfect competition on growth within an R&D-based growth model with human capital accumulation. We find that steady-state growth is driven only by incentives to accumulate human capital and is independent of scale effects. In the model imperfect competition has a positive growth effect, while influencing the allocation of human capital to the diferent economic activities. Contrary to general wisdom, high R&D investment is not always associated with high output growth.Endogenous Growth;Human Capital;R&D

Can Market Power influence Employment, Wage Inequality and Growth ?

We introduce an efficiency-wage mechanism into an innovation-driven growth model. Due to informational problems, the labour market is segmented and homogeneous workers may be employed either in a non-competitive intermediate sector or in a competitive research one. We analyse the impact that variations in the monopoly power of the intermediate firms may have on unemployment, wage inequality and growth. We find that the lower the product market competition in the intermediate sector, the higher the research employment, the lower the intermediate sector employment, the higher the aggregate growth rate. Growth and inequality are negatively correlated whereas growth and unemployment are positively correlated. The last two results are obtained through numerical simulations.Efficiency wages; research and development; endogenous growth; market power

The sources of sharing externalities: Specialization vs Competition

In this paper, we undertake an in-depth inquiry into the nature of sharing externalities, and study how they affect the market outcome. We show that the key thing for understanding sharing externalities is the interplay between two forces: the specialization/complexity effect, on the one hand, and the competition effect, on the other hand. How the interaction between these two forces generates endogenous increasing returns to scale is definitely understudied in the literature because of the widely used assumption that technology in the final sector displays constant elasticity of substitution (CES) across the employed intermediates. Under CES technologies, the equilibrium markup, which may serve as a reverse measure of the toughness of competition, remains unaffected by entry, as well as by market-size shocks. As a consequence, the competition effect is washed out. The aim of our article is to fix this drawback. In order to achieve our purpose, we develop an extension of the Ethier's (1982) model to the case of a non-specified constant-returns-to-scale (CRS) technology in the final-good sector. The main result of our approach is a lucid decomposition of external increasing returns to scale into two components: (i) a competition effect, which stems from the market interactions between producers of intermediate inputs, and (ii) a specialization/complexity effect. Through this decomposition, we show that the gains from specialization are, in general, not the only factor of external increasing returns to scale. Competition in the intermediate sector also plays a fundamental role. In the CES case (which dominates in the literature), external increasing returns to scale are fully driven by the gains from specialization. At the other extreme is the translog technology, where the external increasing returns to scale are induced solely by the competition effect. In between these two limit-situations, we find that both effects (specialization/complexity and competition) do matter in shaping market outcomes. The other findings of the paper are as follows. First, we obtain a full characterization of the impact of horizontal innovation on prices, markups, and wages. Our model allows us to make a distinction between price-decreasing/increasing and markup-decreasing/increasing competition, and provides necessary and sufficient conditions for each type of competition to occur. Second, we also discriminate between wage-increasing and wage-decreasing competition, which suggests a microeconomic foundation for flexible functional forms of the relationship between. In addition, we find that the competition effect may either reinforce or weaken the impact of the specialization effect on aggregate output

Growth maximising patent lifetime

Using a vertical differentiation model of endogenous growth with stochastic R&D activity, we characterise the optimal patent lifetime a government would set in order to maximise economic growth. We show that a finite patent lifetime does exist and is unique provided that the expected rate of return from R&D is sufficiently large. Additionally, we analyse the impact of the level of competition in the R&D sector, the interest rate, the monopoly profit and the productivity parameter of research technology on this optimal patent lifetime

Childrens health, human capital accumulation, and R&D-based economic growth

We analyze the effects of childrens health on human capital accumulation and on long-run economic growth. For this purpose we design an R&D-based growth model in which the stock of human capital of the next generation is determined by parental education and health investments. We show that i) there is a complementarity between education and health: if parents want to have better educated children, they also raise health investments and vice versa; ii) parental health investments exert an unambiguously positive effect on long-run economic growth, iii) faster population growth reduces long-run economic growth. These results are consistent with the empirical evidence for modern economies in the twentieth century

Heterogenized water oxidation catalysts prepared by immobilizing Klaui-type organometallic precursors

An efficient heterogenized water oxidation catalyst (2_TiO2) has been synthesized by immobilizing the Kläui-type organometallic precursor [Cp*Ir{P(O)(OH)2}3]Na (2, Cp*=1,2,3,4,5-pentamethylcyclopentadienyl ligand) onto rutile TiO2. Iridium is homogeneously distributed at the molecular and atomic/small cluster level in 2_TiO2 and 2'_TiO2 (solid catalyst recovered after the first catalytic run), respectively, as indicated by STEM-HAADF (scanning transmission electron microscopy - high angle annular dark field) studies. 2'_TiO2 exhibits TOF values up to 23.7 min-1 in the oxidation of water to O2 driven by NaIO4 at nearly neutral pH, and a TON only limited by the amount of NaIO4 used, as indicated by multiple run experiments. Furthermore, while roughly 40¿% leaching is observed during the first catalytic run, 2'_TiO2 does not undergo any further leaching even when in contact with strongly basic solutions and completely maintains its activity for thousands of cycles. NMR studies, in combination with ICP-OES (inductively coupled plasma optical emission spectrometry), indicate that the activation of 2_TiO2 occurs through the initial oxidative dissociation of PO43-, ultimately leading to active centers in which a 1:1 P/Ir ratio is present (derived from the removal of two PO43- units) likely missing the Cp* ligand.Peer ReviewedPostprint (author's final draft

Inland waterway gas-fueled vessels: CASM-based electrification of a pushboat for the European network

The peculiarities of the European inland waterway transport are analyzed, and a novel design of a pushboat for barges convoys is proposed and optimized for the Rhine-Danube corridor. To this aim, a hybrid parallel electric propulsion system is adopted with the perspective to define an eco\u2013friendly vessel. The present work is to be intended as the early-stage in the proof-of-concept (POC) for commercial technologies useful for the electrification of pushboats employed in inland waterway navigation. Specifically, the optimal design solution is highlighted by evaluating of proper attribute weights, which determine the degree of closeness among possible solution and the design target. In particular, CASM methodology to minimize CAPEX and OPEX of a pushboat is adopted