Competition, Innovation and Increasing Returns

Increasing Returns, Imperfect Competition and Factor Prices

We show how, in general equilibrium models featuring increasing returns, imperfect competition and endogenous markups, changes in the scale of economic activity affect income distribution across factors. Whenever Þnal goods are gross-substitutes (grosscomplements), a scale expansion raises (lowers) the relative reward of the scarce factor or the factor used intensively in the sector characteriz...

Sources of Increasing Returns and Regional Innovation in the Uk

This empirical paper investigates the impact of different sources of increasing returns on firm innovative behaviour in different regions of the UK. Of the different sources of increasing returns, the impact of intermediation and the emergence of specialised markets on the probability of innovation is of particular interest to this analysis. The existing literature on regional development in th...

Increasing Returns to Scale, Price Dispersion, and the Distribution of Returns to Innovation

Models of endogenous growth have not been able to account for the variety of empirically observed distributional properties of the returns to innovation, in part, because of the limitations necessarily imposed on competition to cope with increasing returns to scale. Exponential growth, fat tails, Pareto–Levy distributed upper tails, and upper value outliers, are associated with increasing retur...

Increasing Returns and Economic Efficiency

This paper argues that, from the viewpoint of Pareto optimality, the industries with increasing returns are under-expanded relative to those without increasing returns and those with higher degrees of increasing returns are under-expanded relative to those with lower degrees. Ignoring administrative and indirect (such as rent-seeking) costs, subsidies on goods produced under conditions of (high...

Planning, Prices and Increasing Returns