Logo image
Back
Scale effects in endogenous growth theory: an error of aggregation not specification
Journal article   Peer reviewed

Scale effects in endogenous growth theory: an error of aggregation not specification

Christopher Laincz and Pietro Peretto
Journal of economic growth (Boston, Mass.), v 11(3), pp 263-288
01 Sep 2006
DOI: https://doi.org/10.1007/s10887-006-9004-9
Featured in Collection :   UN Sustainable Development Goals @ Drexel

Abstract

Economic growth Effects Endogenous growth Research and development Size of enterprise
Modern Schumpeterian growth theory focuses on the product line as the main locus of innovation and exploits endogenous product proliferation to sterilize the scale effect. The empirical core of this theory consists of two claims: (i) growth depends on average employment (i.e., employment per product line); (ii) average employment is scale invariant. We show that data on employment, R&D personnel, and the number of establishments in the US for the period 1964-2001 provide strong support for these claims. While employment and the total number of R&D workers increase with no apparent matching change in the long-run trend of productivity growth, employment and R&D employment per establishment exhibit no long-run trend. We also document that the number of establishments, employment and population exhibit a positive trend, while the ratio employment/establishment does not. Finally, we provide results of time series tests consistent with the predictions of these models. Reprinted by permission of Springer

Metrics

17 Record Views
122 citations in Web of Science
123 citations in Scopus

Details

UN Sustainable Development Goals (SDGs)

This publication has contributed to the advancement of the following goals:

#8 Decent Work and Economic Growth
#9 Industry, Innovation and Infrastructure

InCites Highlights

Data related to this publication, from InCites Benchmarking & Analytics tool:

Collaboration types
Domestic collaboration
Web of Science research areas
Economics
Logo image