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Innovation by Heterogeneous Leaders

Author

Listed:
  • Tatsuro Iwaisako

    (Graduate School of Economics, Osaka University)

  • Kazuyoshi Ohki

    (Graduate School of Economics, Kanazawa University)

Abstract
We develop a Schumpeterian growth model in which both leaders and followers conduct R&D activities and in which leaders have different quality leads over their followers, determined by a random draw, and thus have different profit flows. We show that leaders with larger quality leads make smaller R&D investments; this result is consistent with the actual behaviors of some previous leader firms such as Sony and Eastman-Kodak. Moreover, we show that subsidizing followers f R&D can promote leaders f aggregate R&D, because promotion of followers f R&D decreases (increases) the number of leaders with larger (smaller) quality leads and smaller (larger) R&D investments.

Suggested Citation

  • Tatsuro Iwaisako & Kazuyoshi Ohki, 2015. "Innovation by Heterogeneous Leaders," Discussion Papers in Economics and Business 15-30-Rev., Osaka University, Graduate School of Economics, revised Apr 2018.
    • Handle: RePEc:osk:wpaper:1530r
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Angus C. Chu & Guido Cozzi & Haichao Fang & Yuichi Furukawa & Chih-Hsing Liao, 2019. "Innovation and Inequality in a Monetary Schumpeterian Model with Heterogeneous Households and Firms," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 34, pages 141-164, October.
    2. Ohki, Kazuyoshi, 2021. "Should public broadcasting companies be continued, scrambled, disbanded or privatized?," MPRA Paper 106766, University Library of Munich, Germany.
    3. Chu, Angus C. & Cozzi, Guido & Furukawa, Yuichi & Liao, Chih-Hsing, 2017. "Inflation and economic growth in a Schumpeterian model with endogenous entry of heterogeneous firms," European Economic Review, Elsevier, vol. 98(C), pages 392-409.
    4. Lu, You-Xun & Chen, Shi-kuan & Lai, Ching-chong, 2022. "Subsidies, Entry, and Economic Growth in a Schumpeterian Model with Incumbents and Entrants," MPRA Paper 112179, University Library of Munich, Germany.
    5. Ohki, Kazuyoshi, 2023. "Disruptive innovation by heterogeneous incumbents and economic growth: When do incumbents switch to new technology?," Journal of Mathematical Economics, Elsevier, vol. 107(C).
    6. You-Xun Lu & Ching-Chong Lai & Po-Yang Yu, 2024. "Effects of patent policy on growth and inequality: exogenous versus endogenous quality improvements," Journal of Economics, Springer, vol. 141(1), pages 1-28, January.
    7. Angus C. Chu & Guido Cozzi & Yuichi Furukawa & Chih‐Hsing Liao, 2019. "Inflation and Innovation in a Schumpeterian Economy with North–South Technology Transfer," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(2-3), pages 683-719, March.
    8. Colin Davis & Laixun Zhao, 2022. "Innovation to Keep or to Sell and Tax Incentives," Discussion Paper Series DP2022-28, Research Institute for Economics & Business Administration, Kobe University, revised Nov 2022.
    9. Angus C. Chu & Guido Cozzi & Haichao Fang & Yuichi Furukawa & Chih-Hsing Liao, 2019. "Innovation and Inequality in a Monetary Schumpeterian Model with Heterogeneous Households and Firms," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 34, pages 141-164, October.
    10. Lu, You-Xun & Chen, Shi-kuan & Lai, Ching-chong, 2022. "Monetary Policy and Economic Growth in a Schumpeterian Model with Incumbents and Entrants," MPRA Paper 112177, University Library of Munich, Germany.

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    More about this item

    Keywords

    Schumpeterian growth; Heterogeneous leaders; R&D subsidies;
    All these keywords.

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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