that influence innovation by firms and their subsequent growth. Our data come from a survey of nearly 4,000 firms in 24 … and opportunities for innovation, virtually every firm that emerged from central planning was maladapted to the new … competition in market economies. We find evidence of the importance of a minimum of rivalry in both innovation and growth: the …

imitate by hiring a worker from a firm that has already innovated. We show that if innovation firms can commit to long … contracts, there is too little innovation and too much imitation in equilibrium. Our model is tractable and allows us to analyze … welfare effects of various policies in the limited commitment case. We find that subsidizing innovation and taxing imitation …