From Imitation to Innovation: Where Is all that Chinese R&D Going?

Michael König, Zheng Michael Song, Kjetil Storesletten and Fabrizio Zilibotti

No 27404, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We construct an endogenous growth model with random interactions where firms are subject to distortions. The TFP distribution evolves endogenously as firms seek to upgrade their technology over time either by innovating or by imitating other firms. We use the model to quantify the effects of misallocation on TFP growth in emerging economies. We structurally estimate the stationary state of the dynamic model targeting moments of the empirical distribution of R&D and TFP growth in China during the period 2007–12. The estimated model fits the Chinese data well. We compare the estimates with those obtained using data for Taiwan and perform counterfactuals to study the effect of alternative policies. R&D misallocation has a large effect on TFP growth.

JEL-codes: L16 O31 O47 O53 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-bec, nep-cna, nep-com, nep-cse, nep-eff, nep-ino, nep-lab, nep-sbm, nep-tid and nep-tra
Note: EFG
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Citations: View citations in EconPapers (3)

Published as "From Imitation to Innovation: Where Is all that Chinese R&D Going?" (with Michael Koenig, Zheng Song, and Kjetil Storesletten) was published in Econometrica 90(4), pp. 1615-1654 (July 2022).

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Journal Article: From Imitation to Innovation: Where Is All That Chinese R&D Going? (2022)
Working Paper: From Imitation to Innovation: Where Is all that Chinese R&D Going? (2020)
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