Chen, Been-Lon; Chu, Angus C. - Institute of Economics, Academia Sinica - 2010
Empirical studies often find significant and positive R&D spillovers across firms. In this note, we incorporate this spillover effect into a scale-invariant quality-ladder model. We find that the modified model features multiple steady states (i) a high-R&D steady state, (ii) a low-R&D steady...