From Imitation to Innovation: Where is All that Chinese R&D Going?

@article{Knig2020FromIT,
  title={From Imitation to Innovation: Where is All that Chinese R\&D Going?},
  author={Michael D. K{\"o}nig and Zheng Song and Kjetil Storesletten and Fabrizio Zilibotti},
  journal={NBER Working Paper Series},
  year={2020}
}
We construct a model of firm dynamics with heterogeneous productivity and distortions. The productivity distribution evolves endogenously as the result of the decisions of firms seeking to upgrade their productivity over time. Firms can adopt two strategies toward that end: imitation and innovation. The theory bears predictions about the evolution of the productivity distribution. We structurally estimate the stationary state of the dynamic model targeting moments of the empirical distribution… 
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