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Does competition spur innovation? Evidence from labor productivity data for the banking industry

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  • Tabacco, Giovanni Alberto

Abstract

In this article, I address a research question that bears crucial policy implications and on which economic theory provides controversial conclusions: does innovation emerge from competition? I provide econometric evidence for the EU banking industry, that intensity of price competition does not affect innovation. Results hold across various estimation methods.

Suggested Citation

  • Tabacco, Giovanni Alberto, 2015. "Does competition spur innovation? Evidence from labor productivity data for the banking industry," Economics Letters, Elsevier, vol. 132(C), pages 45-47.
    • Handle: RePEc:eee:ecolet:v:132:y:2015:i:c:p:45-47
    DOI: 10.1016/j.econlet.2015.04.020
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    10. Federico Etro, 2006. "Aggressive leaders," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 146-154, March.
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    12. Lerner, Josh, 2006. "The new new financial thing: The origins of financial innovations," Journal of Financial Economics, Elsevier, vol. 79(2), pages 223-255, February.
    13. Giovanni Alberto Tabacco, 2015. "Market Structure And Intensity Of Price Competition In Eu Banking," Journal of Competition Law and Economics, Oxford University Press, vol. 11(2), pages 353-363.
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    Cited by:

    1. Daragh O'Leary & Justin Doran & Bernadette Power, 2022. "Intensity of competition and firm innovative behavior," Economics and Business Letters, Oviedo University Press, vol. 11(2), pages 53-69.
    2. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    3. Shubin Wang & Qilei Liu & Hasan Dinçer & Serhat Yüksel, 2020. "Analysis of Innovation Performance for Retail Banking Industry With the Hybrid Fuzzy Decision-Making Approach," SAGE Open, , vol. 10(2), pages 21582440209, May.
    4. Bourke, Jane & Roper, Stephen & Love, James H., 2020. "Innovation in legal services: The practices that influence ideation and codification activities," Journal of Business Research, Elsevier, vol. 109(C), pages 132-147.

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    More about this item

    Keywords

    Competition; Innovation; Labor productivity;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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