Technological Spillovers and Patterns of Growth with Sector-Specific R&D

Doi, Junko and Mino, Kazuo (2004): Technological Spillovers and Patterns of Growth with Sector-Specific R&D.

Abstract

This paper studies a two-sector model of endogenous technical change in which expansion of each production sector is associated with sector-specific R&D investment. It is shown that the pattern of growth is sensitive to the specification of intersectoral technological spillover as well as to the preference structure. If technological spillovers and preferences of consumers are represented by CES functional forms, the balanced-growth equilibrium may not exhibit a well-behaved saddlepoint property: it is possible that the balanced-growth path is locally indeterminate or unstable. In addition, a slight modification of technological spillover effects easily yields multiple balanced-growth paths. In contrast, Cobb-Douglas specifications present a unique and determinate balanced-growth path.

• Item Type: MPRA Paper
• Language: English
• Keywords: R&D based growth, two-sector economy, technological spillover
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes

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