Competition, Imitation, and Technical Change : Quality vs. Variety
Some researchers have documented that the path of development is remarkably related to the pattern of sectoral diversification. Others have highlighted the relation between productive specialization and economic progress. This paper explores the ro...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090828081350 http://hdl.handle.net/10986/4221 |
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okr-10986-42212021-04-23T14:02:16Z Competition, Imitation, and Technical Change : Quality vs. Variety Cusolito, Ana ACCOUNTING ARBITRAGE BERTRAND COMPETITION BUSINESS CYCLES CENTRAL BANK COMPETITIVE ADVANTAGE COMPLEXITY CONSTANT RETURNS TO SCALE DATA ANALYSIS DEVELOPMENT ECONOMICS DISCUSSIONS DUOPOLY ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC PROGRESS ECONOMICS RESEARCH ELASTICITY ELASTICITY OF SUBSTITUTION ENDOGENOUS VARIABLES EQUILIBRIUM EXOGENOUS VARIABLES EXPENDITURES EXPORTS EXTERNAL KNOWLEDGE FINANCIAL MARKETS FOREIGN INVESTMENT GLOBAL ECONOMY GLOBALIZATION GOVERNMENT POLICIES GROWTH PATH GROWTH RATE IDEA IDEAS IMPERFECT SUBSTITUTES INDUSTRIAL ECONOMICS INDUSTRIAL STRUCTURE INNOVATION INNOVATION STRATEGY INNOVATIONS INSIGHTS INTEGRATION INTELLECTUAL PROPERTY INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE GOODS INTERMEDIATE PRODUCTS INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTION INVENTIONS KNOWLEDGE ACQUISITION LEADING MACROECONOMICS MANUFACTURING MARKET COMPETITION MARKET STRUCTURE MONOPOLISTIC COMPETITION NEGATIVE EXTERNALITY NETWORKS ORGANIZATIONAL CHANGE OUTPUTS PERFECT COMPETITION PERFORMANCE MEASURE POLITICAL ECONOMY PRICE CEILINGS PRODUCT DIFFERENTIATION PRODUCT INNOVATION PRODUCT MARKET PRODUCT QUALITY PRODUCT SUBSTITUTION PRODUCTION FUNCTION PRODUCTION PROCESS PRODUCTIVITY PROFIT MAXIMIZATION R&D R&D SERVICES RESULT RESULTS SALE SALES SEARCH SUBSTITUTES SUBSTITUTION EFFECT SUPPLIER TECHNOLOGICAL INNOVATION TOTAL OUTPUT TOTAL SALES VARIETY WEB Some researchers have documented that the path of development is remarkably related to the pattern of sectoral diversification. Others have highlighted the relation between productive specialization and economic progress. This paper explores the role of product market competition and intellectual property rights protection in the pattern of sectoral diversification. The paper confirms the insight of the innovation literature, that competition induces firms to specialize and upgrade the quality of existing goods. However, it reveals a new force, called the imitation effect, through which competition biases technical change toward product diversification. The paper shows that if knowledge spillovers increase with imitation, or the degree of product substitution is high, weak protection of property rights encourages firms to create low-quality goods, thereby directing technical change toward diversification. The predictions are tested with data on Italian firms' innovation activity. They are found to be consistent with observed behavior. 2012-03-19T19:12:06Z 2012-03-19T19:12:06Z 2009-07-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090828081350 http://hdl.handle.net/10986/4221 English Policy Research working paper ; no. WPS 4997 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ARBITRAGE BERTRAND COMPETITION BUSINESS CYCLES CENTRAL BANK COMPETITIVE ADVANTAGE COMPLEXITY CONSTANT RETURNS TO SCALE DATA ANALYSIS DEVELOPMENT ECONOMICS DISCUSSIONS DUOPOLY ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC PROGRESS ECONOMICS RESEARCH ELASTICITY ELASTICITY OF SUBSTITUTION ENDOGENOUS VARIABLES EQUILIBRIUM EXOGENOUS VARIABLES EXPENDITURES EXPORTS EXTERNAL KNOWLEDGE FINANCIAL MARKETS FOREIGN INVESTMENT GLOBAL ECONOMY GLOBALIZATION GOVERNMENT POLICIES GROWTH PATH GROWTH RATE IDEA IDEAS IMPERFECT SUBSTITUTES INDUSTRIAL ECONOMICS INDUSTRIAL STRUCTURE INNOVATION INNOVATION STRATEGY INNOVATIONS INSIGHTS INTEGRATION INTELLECTUAL PROPERTY INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE GOODS INTERMEDIATE PRODUCTS INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTION INVENTIONS KNOWLEDGE ACQUISITION LEADING MACROECONOMICS MANUFACTURING MARKET COMPETITION MARKET STRUCTURE MONOPOLISTIC COMPETITION NEGATIVE EXTERNALITY NETWORKS ORGANIZATIONAL CHANGE OUTPUTS PERFECT COMPETITION PERFORMANCE MEASURE POLITICAL ECONOMY PRICE CEILINGS PRODUCT DIFFERENTIATION PRODUCT INNOVATION PRODUCT MARKET PRODUCT QUALITY PRODUCT SUBSTITUTION PRODUCTION FUNCTION PRODUCTION PROCESS PRODUCTIVITY PROFIT MAXIMIZATION R&D R&D SERVICES RESULT RESULTS SALE SALES SEARCH SUBSTITUTES SUBSTITUTION EFFECT SUPPLIER TECHNOLOGICAL INNOVATION TOTAL OUTPUT TOTAL SALES VARIETY WEB |
| spellingShingle |
ACCOUNTING ARBITRAGE BERTRAND COMPETITION BUSINESS CYCLES CENTRAL BANK COMPETITIVE ADVANTAGE COMPLEXITY CONSTANT RETURNS TO SCALE DATA ANALYSIS DEVELOPMENT ECONOMICS DISCUSSIONS DUOPOLY ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC PROGRESS ECONOMICS RESEARCH ELASTICITY ELASTICITY OF SUBSTITUTION ENDOGENOUS VARIABLES EQUILIBRIUM EXOGENOUS VARIABLES EXPENDITURES EXPORTS EXTERNAL KNOWLEDGE FINANCIAL MARKETS FOREIGN INVESTMENT GLOBAL ECONOMY GLOBALIZATION GOVERNMENT POLICIES GROWTH PATH GROWTH RATE IDEA IDEAS IMPERFECT SUBSTITUTES INDUSTRIAL ECONOMICS INDUSTRIAL STRUCTURE INNOVATION INNOVATION STRATEGY INNOVATIONS INSIGHTS INTEGRATION INTELLECTUAL PROPERTY INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE GOODS INTERMEDIATE PRODUCTS INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTION INVENTIONS KNOWLEDGE ACQUISITION LEADING MACROECONOMICS MANUFACTURING MARKET COMPETITION MARKET STRUCTURE MONOPOLISTIC COMPETITION NEGATIVE EXTERNALITY NETWORKS ORGANIZATIONAL CHANGE OUTPUTS PERFECT COMPETITION PERFORMANCE MEASURE POLITICAL ECONOMY PRICE CEILINGS PRODUCT DIFFERENTIATION PRODUCT INNOVATION PRODUCT MARKET PRODUCT QUALITY PRODUCT SUBSTITUTION PRODUCTION FUNCTION PRODUCTION PROCESS PRODUCTIVITY PROFIT MAXIMIZATION R&D R&D SERVICES RESULT RESULTS SALE SALES SEARCH SUBSTITUTES SUBSTITUTION EFFECT SUPPLIER TECHNOLOGICAL INNOVATION TOTAL OUTPUT TOTAL SALES VARIETY WEB Cusolito, Ana Competition, Imitation, and Technical Change : Quality vs. Variety |
| geographic_facet |
The World Region |
| relation |
Policy Research working paper ; no. WPS 4997 |
| description |
Some researchers have documented that
the path of development is remarkably related to the pattern
of sectoral diversification. Others have highlighted the
relation between productive specialization and economic
progress. This paper explores the role of product market
competition and intellectual property rights protection in
the pattern of sectoral diversification. The paper confirms
the insight of the innovation literature, that competition
induces firms to specialize and upgrade the quality of
existing goods. However, it reveals a new force, called the
imitation effect, through which competition biases technical
change toward product diversification. The paper shows that
if knowledge spillovers increase with imitation, or the
degree of product substitution is high, weak protection of
property rights encourages firms to create low-quality
goods, thereby directing technical change toward
diversification. The predictions are tested with data on
Italian firms' innovation activity. They are found to
be consistent with observed behavior. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Cusolito, Ana |
| author_facet |
Cusolito, Ana |
| author_sort |
Cusolito, Ana |
| title |
Competition, Imitation, and Technical Change : Quality vs. Variety |
| title_short |
Competition, Imitation, and Technical Change : Quality vs. Variety |
| title_full |
Competition, Imitation, and Technical Change : Quality vs. Variety |
| title_fullStr |
Competition, Imitation, and Technical Change : Quality vs. Variety |
| title_full_unstemmed |
Competition, Imitation, and Technical Change : Quality vs. Variety |
| title_sort |
competition, imitation, and technical change : quality vs. variety |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090828081350 http://hdl.handle.net/10986/4221 |
| _version_ |
1764390470823182336 |