This paper develops an endogenous directed technical change model that is consistent with the data on the distribution of firms and production across high- and low-tech sectors, and its relationship to economic growth, in a number of developed countries. We argue that scale effects at the...

This paper builds an endogenous growth model of directed technical change with vertical and horizontal R&D and scale effects at the industry level to study an analytical mechanism that is consistent with the observed cross-country pattern in the skill structure, the technology structure and...