This paper develops a model of repeated innovation with knowledge spillovers. The model's novel feature is that firms … compete on two dimensions: 1) product quality or cost, where one firm's innovation ultimately spills over to other firms; and … some circumstances dramatically reduce the long-run average level of innovation; 2) they lead to endogenous bunching, or …

We analyze how expropriation risk reduces incentives for innovation and reallocates resources from the innovative … risk, such as corruption, negatively impacts innovation by reducing R&D expenditure, human capital in R&D, number of … highlight the detrimental effects of expropriation risk on innovation and economic development at the country level …