Distance to Frontier, Selection, and Economic Growth

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Distance to Frontier, Selection, and Economic Growth

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dc.contributor.author Zilibotti, Fabrizio
dc.contributor.author Aghion, Philippe
dc.contributor.author Acemoglu, Daron
dc.date.accessioned 2010-11-15T15:00:44Z
dc.date.issued 2006
dc.identifier.citation Acemoglu, Daron, Philippe Aghion, and Fabrizio Zilibotti. 2006. Distance to frontier, selection, and economic growth. Journal of the European Economic Association 4(1): 37-74. en_US
dc.identifier.issn 1542-4774 en_US
dc.identifier.issn 1542-4766 en_US
dc.identifier.uri http://nrs.harvard.edu/urn-3:HUL.InstRepos:4554122
dc.description.abstract We analyze an economy where firms undertake both innovation and adoption of technologies from the world technology frontier. The selection of high-skill managers and firms is more important for innovation than for adoption. As the economy approaches the frontier, selection becomes more important. Countries at early stages of development pursue an investment-based strategy, which relies on existing firms and managers to maximize investment but sacrifices selection. Closer to the world technology frontier, economies switch to an innovation-based strategy with short-term relationships, younger firms, less investment, and better selection of firms and managers. We show that relatively backward economies may switch out of the investment-based strategy too soon, so certain policies such as limits on product market competition or investment subsidies, which encourage the investment-based strategy, may be beneficial. However, these policies may have significant long-run costs because they make it more likely that a society will be trapped in the investment-based strategy and fail to converge to the world technology frontier. en_US
dc.description.sponsorship Economics en_US
dc.language.iso en_US en_US
dc.publisher MIT Press en_US
dc.relation.isversionof doi:10.1162/jeea.2006.4.1.37 en_US
dash.license LAA
dc.title Distance to Frontier, Selection, and Economic Growth en_US
dc.type Journal Article en_US
dc.description.version Version of Record en_US
dc.relation.journal Journal of the European Economic Association en_US
dash.depositing.author Aghion, Philippe
dc.date.available 2010-11-15T15:00:44Z

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  • FAS Scholarly Articles [6464]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University

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