Distance to frontier, selection, and economic growth
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Distance to frontier, selection, and economic growth
- by
- Acemoglu, Daron; Aghion, Philippe; Zilibotti, Fabrizio; Massachusetts Institute of Technology. Dept. of Economics
- Publication date
- 2002
- Topics
- Technological innovations, Productivity accounting, Economic development, Capital investments, Skilled labor
- Publisher
- Cambridge, MA : Massachusetts Institute of Technology, Dept. of Economics
- Collection
- mitlibraries; blc; americana
- Contributor
- MIT Libraries
- Language
- English
"June 25, 2002."
Includes bibliographical references (p. 43-46)
We analyze an economy where managers engage both in the adoption of technologies from the world frontier and in innovation activities. The selection of high-skill managers is more important for innovation activities. As the economy approaches the technology frontier, selection becomes more important. As a result, countries at early stages of development pursue an investment-based strategy, with long-term relationships, high average size and age of firms, large average investments, but little selection. Closer to the world technology frontier, there is a switch to an innovation-based strategy with short-term relationships, younger firms, less investment and better selection of managers. We show that relatively backward economies may switch out of the investment-based strategy too soon, so certain economic institutions and policies, such as limits on product market competition or investment subsidies, that encourage the investment-based strategy may be beneficial. However, societies that cannot switch out of the investment based strategy fail to converge to the world technology frontier. Non-convergence traps are more likely when policies and institutions are endogenized, enabling beneficiaries of existing policies to bribe politicians to maintain these policies. Keywords: appropriate institutions, convergence, economic growth, innovation, imitation, political economy of growth, selection, technical change, traps. JEL Classifications: O31, O33, O38, O40, L16
Includes bibliographical references (p. 43-46)
We analyze an economy where managers engage both in the adoption of technologies from the world frontier and in innovation activities. The selection of high-skill managers is more important for innovation activities. As the economy approaches the technology frontier, selection becomes more important. As a result, countries at early stages of development pursue an investment-based strategy, with long-term relationships, high average size and age of firms, large average investments, but little selection. Closer to the world technology frontier, there is a switch to an innovation-based strategy with short-term relationships, younger firms, less investment and better selection of managers. We show that relatively backward economies may switch out of the investment-based strategy too soon, so certain economic institutions and policies, such as limits on product market competition or investment subsidies, that encourage the investment-based strategy may be beneficial. However, societies that cannot switch out of the investment based strategy fail to converge to the world technology frontier. Non-convergence traps are more likely when policies and institutions are endogenized, enabling beneficiaries of existing policies to bribe politicians to maintain these policies. Keywords: appropriate institutions, convergence, economic growth, innovation, imitation, political economy of growth, selection, technical change, traps. JEL Classifications: O31, O33, O38, O40, L16
- Addeddate
- 2011-04-28 16:02:58
- Associated-names
- Aghion, Philippe; Zilibotti, Fabrizio; Massachusetts Institute of Technology. Dept. of Economics
- Bookplateleaf
- 0003
- Call number
- 55224291
- Camera
- Canon 5D
- External-identifier
- urn:oclc:record:1043014135
- Foldoutcount
- 0
- Identifier
- distancetofronti00acem
- Identifier-ark
- ark:/13960/t74t7g738
- Ocr_converted
- abbyy-to-hocr 1.1.37
- Ocr_module_version
- 0.0.21
- Openlibrary_edition
- OL24640030M
- Openlibrary_work
- OL15720092W
- Page-progression
- lr
- Page_number_confidence
- 65
- Page_number_module_version
- 1.0.3
- Pages
- 66
- Ppi
- 300
- Scandate
- 20110430031132
- Scanner
- scribe10.boston.archive.org
- Scanningcenter
- boston
- Worldcat (source edition)
- 55224291
- Full catalog record
- MARCXML
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