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The advertising channel, however, only features indirectly through ?
Thus, we can obtain the desired inverse dependence of innovation expenditures to size as long as the advertising channel scales weakly enough to compensate any strong scalability coming from the R&D technology itself.
The left side of the equation is the total change in value that is associated with an n-to-(n + 1) transition, and therefore it measures the marginal gain for a firm of size n of increasing in size through successful external innovation.41 In the absence of the advertising channel (?
Here, we intend to explore the implications of a subsidy on R&D, when the advertising channel provides the necessary spillover effect to explain the deviation from Gibrat's law seen in the data.
the advertising channel, we need decreasing returns to scale in R&D (i.e.
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