Working Paper: NBER ID: w28019
Authors: Boyan Jovanovic; Zhu Wang
Abstract: We study innovation and diffusion of technology at the industry level. We derive an industry's evolution, from birth to its maturity, and we characterize how diffusion affects the incentive to innovate. The model implies that protection of innovators should be only partial due to the matching externality in the meetings in which idea transfers take place. The model also shows that enhancing idea diffusion is socially beneficial and can generate industry overtaking patterns endogenously. We fit the model to the early experiences of the U.S. automobile and personal computer industries and quantify the theoretical predictions.
Keywords: No keywords provided
JEL Codes: L00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| idea diffusion (O36) | innovation incentives (O31) |
| idea diffusion (O36) | industry welfare (L89) |
| innovation incentives (O31) | idea diffusion (O36) |
| idea diffusion (O36) | competitive landscape of industries (L19) |