Little attention has been devoted to the question of how late movers overcome first-mover advantage and catch up with incumbents. We examine the role in catch-up of late movers' optimal resource allocation between innovation and imitation. Building on Nelson and Winter's (1982) technology...

We document the decoupling of invention and post-invention investment in the US. Decoupling began in the 1970s as states adopted employment protection laws that increased firing costs and played a significant role in jobless growth, the vertical and geographical fragmentation of firm activities,...