Abstract
This paper is concerned with the validity of historical claims that there may be a ''penalty'' of being a pioneer. The analysis applies Aghion and Howitt's (1994) distinction between fundamental and secondary knowledge to investigate the existence of a ''penalty'' of being a pioneer within a general equilibrium model of endogenous growth. The penalty may take at least three forms: a reduced incentive to invest in research, a lower rate of growth of GDP and technological lock-in. Hence, if there is a penalty to being a pioneer, it provides an alternative explanation for convergence to those already suggested in the literature. Whether or not such a penalty exists in all three senses about is found to depend upon the magnitude of production and research spillovers. Laissez-faire research employment may be either higher or lower than is socially optimal, and it is possible to answer the question whether for example a war by destroying existing skills and secondary knowledge can accelerate growth and increase economic welfare.