题目: Market Structure, Factor Endowment, and Industry Upgrading

主讲人： Wang, Yong, Assistant Professor, Hong Kong University of Science and Technology

Abstract

A simple growth model is developed to study the industrial upgrading process when the market structure may endogenously deviate from perfect competition depending on when to first adopt the new and more capital-intensive technology. We show that the factor price signals can be distorted by the non-competitive goods market structure in a general equilibrium, which results in a non-monotonic impact of the capital endowment on both the static allocation efficiency and the optimal timing of industrial upgrading. More specifically, when the capital endowment is sufficiently small or sufficiently large, the market equilibrium always achieves Pareto efficiency, no matter whether the endogenous market structure is monopoly or perfectly competitive. When the capital endowment falls into some intermediate range, inefficiency arises: the old, labor-intensive technology is over-employed and the aggregate output is depressed. In addition, an increase in the initial capital endowment may sometimes delay the adoption of the more capital-intensive technology. Welfare-enhancing industrial policies are discussed.