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Defensive strategies in quality ladders

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  • Ledezma, Ivan

Abstract

This paper analyses the potentially defensive behaviour of patent-race winners and the ensuing effect on aggregate R&D effort. We propose a quality-ladder model where leaders strategically acquire a technology advantage and are able to innovate. In this context, product-market regulation, by affecting this strategic behaviour, may have either a positive or negative effect on aggregate R&D intensity. The negative effect is likely to pertain in liberal markets, whereas the positive influence arises in more regulated environments, and can be stronger for larger jumps in innovation. These steady-state equilibrium outcomes are consistent with the puzzling patterns in data from manufacturing industries in 14 OECD countries over the 1987–2003 period.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 37 (2013)
Issue (Month): 1 ()
Pages: 176-194

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Handle: RePEc:eee:dyncon:v:37:y:2013:i:1:p:176-194

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Web page: http://www.elsevier.com/locate/jedc

Related research

Keywords: Innovative leaders; Quality ladders; Product market regulation; R&D;

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Cited by:
  1. Bruno Amable & Ivan Ledezma & Stéphane Robin, 2014. "Product market regulation, innovation and productivity," Documents de travail du Centre d'Economie de la Sorbonne 14025, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  2. Bruno Amable & Ivan Ledezma, 2013. "Export performance and product market regulation," Documents de travail du Centre d'Economie de la Sorbonne 13010, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

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