TY  - JOUR
AU  - Acemoglu,Daron
AU  - Gancia,Gino
AU  - Zilibotti,Fabrizio
TI  - Competing Engines of Growth: Innovation and Standardization
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15958
PY  - 2010
Y2  - April 2010
UR  - http://www.nber.org/papers/w15958
L1  - http://www.nber.org/papers/w15958.pdf
N1  - Author contact info:
Daron Acemoglu
Department of Economics
MIT, E52-380B
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-1927
Fax: 617/253-1330
E-Mail: daron@mit.edu

Gino Gancia
CREI and Universitat Pompeu Fabra
Ramon Trias Fargas 25-27
08005 Barcelona
Spain
E-Mail: ggancia@crei.cat

Fabrizio Zilibotti
Department of Economics
University of Zurich
Mühlebachstrasse 86
CH-8008 Zürich
Switzerland
Tel: +41 44 6345188
E-Mail: fabrizio.zilibotti@econ.uzh.ch
AB  - We study a dynamic general equilibrium model where innovation takes the form of the introduction new goods, whose production requires skilled workers. Innovation is followed by a costly process of standardization, whereby these new goods are adapted to be produced using unskilled labor. Our framework highlights a number of novel results. First, standardization is both an engine of growth and a potential barrier to it. As a result, growth in an inverse U-shaped function of the standardization rate (and of competition). Second, we characterize the growth and welfare maximizing speed of standardization. We show how optimal IPR policies affecting the cost of standardization vary with the skill-endowment, the elasticity of substitution between goods and other parameters. Third, we show that the interplay between innovation and standardization may lead to multiple equilibria. Finally, we study the implications of our model for the skill-premium and we illustrate novel reasons for linking North-South trade to intellectual property rights protection.
ER  -