COMPETITION AND GROWTH WITH STEP-BY-STEP INNOVATION - AN EXAMPLE

This paper develops a simple example to analyse the relationship betwe en product market competition and growth in a model with step-by-step innovations, where laggards can never leapfrog the current industry le aders, but instead must first catch up with the leaders before battlin g for technological leadership in the future. Unlike in existing Schum peterian models of growth, more intense product market competition and /or imitations may be growth-enhancing. (C) 1997 Elsevier Science B.V.