Technological progress and market growth: an empirical study based on the quality-ladder approach

Abstract

This paper develops an extended version of the quality-ladder model by allowing for heterogeneous markets. Based on this model, it presents an empirical analysis of innovation-based growth at the market level using a technometric measurement concept. It can be shown that a growth-promoting effect due to technological progress in a particular, single year is observed after between two and up to seven years. This is true not only for highly innovative markets, but also for those in which fewer R&D resources are invested.