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Technology lock-in with horizontal and vertical innovations through limited R&D spending

Bondarev, Anton and Greiner, Alfred. (2017) Technology lock-in with horizontal and vertical innovations through limited R&D spending. WWZ Working Papers, 2017 (04).

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Official URL: https://edoc.unibas.ch/61313/

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Abstract

In this paper we analyze an inter-temporal optimization problem of a representative firm that invests in horizontal and vertical innovations and that faces a constraint with respect to total R&D spending. We find that there can exist two different steady-states of the economy when the amount of research spending falls short of an endogenously determined threshold: one with higher productivities and less new technologies being developed, and the other with more technologies being created and lower productivities. But, for a higher amount of R&D spending the steady-state becomes unique and the firm produces the whole spectrum of available technologies. Thus, a lock-in effect may arise that, however, van be overcome by raising R&D spending sufficiently.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Umweltökonomie (Krysiak)
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Bondarev, Anton A.
Item Type:Working Paper
Publisher:WWZ, University of Basel
Number of Pages:22
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2017/04
Last Modified:07 Mar 2018 13:02
Deposited On:07 Mar 2018 13:02

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