innovation by maximizing the number of firms engaged in R&D. Surprisingly, this standard is more stringent for industries … disposed to innovate rapidly. If a single standard is applied to heterogeneous industries, it will encourage entry, and … therefore innovation, in some industries while discouraging it in others. The model suggest a number of important implications …

result, their individual investments are lumpy. In partial equilibrium, this yields substantial skewness and kurtosis in …

heterogeneity in both capital and total factor productivity alongside low-level investments exempt from adjustment costs to develop … wages and interest rates, the authors show that the dynamics of plants' investments differ sharply in their presence. Thus … lumpy investments, but act to eliminate them. …