I study an economy where oligopolistic firms establish in-house R&D programs to produce a continuous flow of cost-reducing (incremental) innovations. The scale of firms' R&D operations determines the rate of productivity growth. I first study the role of concentration, firm size, and demand,...

We investigate the incentive for partial vertical integration, namely, partial ownership agreements between manufacturers and retailers, when the retailers are privately informed about their production costs and engage in differentiated good price competition. Partial vertical integration...