Endogenous growth and structural change through vertical and horizontal innovations

Bondarev A, Greiner A (2014) Working Papers in Economics and Management; 03-2014.
Bielefeld: Bielefeld University, Department of Business Administration and Economics.

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Abstract / Notes
This paper combines horizontal and vertical innovations to build an endogenous growth model that allows for structural change. Older technologies are continuously replaced by newer ones due to creative destruction and new technologies appear as a result of horizontal innovations and as a result of consumers’ preferences for variety. We assume fixed operational costs for the manufacturing sector and an endogenously determined price of the patent for each new technology. The duration of a patent is not limited but every industry is profitable only for a certain period of time, thus making the effective time of existence of the technology endogenous and finite. We demonstrate that such an economy exhibits constant growth rates that are proportional to the average productivity growth, despite the ongoing disappearance of older technologies from the industry.
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Bondarev A, Greiner A. Endogenous growth and structural change through vertical and horizontal innovations. Working Papers in Economics and Management. Vol 03-2014. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2014.
Bondarev, A., & Greiner, A. (2014). Endogenous growth and structural change through vertical and horizontal innovations (Working Papers in Economics and Management, 03-2014). Bielefeld: Bielefeld University, Department of Business Administration and Economics. doi:10.4119/unibi/2915483
Bondarev, A., and Greiner, A. (2014). Endogenous growth and structural change through vertical and horizontal innovations. Working Papers in Economics and Management, 03-2014, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Bondarev, A., & Greiner, A., 2014. Endogenous growth and structural change through vertical and horizontal innovations, Working Papers in Economics and Management, no.03-2014, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
A. Bondarev and A. Greiner, Endogenous growth and structural change through vertical and horizontal innovations, Working Papers in Economics and Management, vol. 03-2014, Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2014.
Bondarev, A., Greiner, A.: Endogenous growth and structural change through vertical and horizontal innovations. Working Papers in Economics and Management, 03-2014. Bielefeld University, Department of Business Administration and Economics, Bielefeld (2014).
Bondarev, Anton, and Greiner, Alfred. Endogenous growth and structural change through vertical and horizontal innovations. Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2014. Working Papers in Economics and Management. 03-2014.
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