IDEAS home Printed from https://ideas.repec.org/a/jfr/rwe111/v6y2015i1p112-117.html
   My bibliography  Save this article

The Effect of Research & Development Investments on New Firm Entry

Author

Listed:
  • Panagiotis Kotsios
  • Aglaia Gkampoura
  • Vaios Kotsios

Abstract

The entry of new competitors operates as a balancing force against high levels of industrial concentration and the abuse of dominant position by firms with large market shares. This paper¡¯s goal is to examine theoretically the impact of Research & Development investments on new firm entry. While dominant economic theory supports that large R&D investments are a prerequisite for technological change and economic growth, so that large incumbent firms are considered to have an advantage against new, typically smaller firms, theoretical and empirical research has shown that this may not be the case. Small firms¡¯ contribution in innovation and economic development is far greater than expected.

Suggested Citation

  • Panagiotis Kotsios & Aglaia Gkampoura & Vaios Kotsios, 2015. "The Effect of Research & Development Investments on New Firm Entry," Research in World Economy, Research in World Economy, Sciedu Press, vol. 6(1), pages 112-117, March.
    • Handle: RePEc:jfr:rwe111:v:6:y:2015:i:1:p:112-117
    as

    Download full text from publisher

    File URL: http://www.sciedu.ca/journal/index.php/rwe/article/view/6216/3721
    Download Restriction: no
    File URL: http://www.sciedu.ca/journal/index.php/rwe/article/view/6216
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. R. E. Caves & M. E. Porter, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 241-261.
    2. William S. Comanor, 1967. "Market Structure, Product Differentiation, and Industrial Research," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 81(4), pages 639-657.
    3. Kleinknecht, Alfred, 1987. "Measuring R&D in Small Firms: How Much Are We Missing?," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 253-256, December.
    4. Preston R. Fee & Hugo M. Mialon & Michael A. Williams, 2004. "What Is a Barrier to Entry?," American Economic Review, American Economic Association, vol. 94(2), pages 461-465, May.
    5. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, December.
    6. Pavitt, Keith & Robson, Michael & Townsend, Joe, 1987. "The Size Distribution of Innovating Firms in the UK: 1945-1983," Journal of Industrial Economics, Wiley Blackwell, vol. 35(3), pages 297-316, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    2. Tavassoli, Sam, 2015. "Innovation determinants over industry life cycle," Technological Forecasting and Social Change, Elsevier, vol. 91(C), pages 18-32.
    3. Kumar, Nagesh & Saqib, Mohammed, 1996. "Firm size, opportunities for adaptation and in-house R & D activity in developing countries: the case of Indian manufacturing," Research Policy, Elsevier, vol. 25(5), pages 713-722, August.
    4. Soete, Luc & Verspagen, Bart & ter Weel, Bas, 2010. "Systems of Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1159-1180, Elsevier.
    5. Hall, B.H., 2011. "Innovation and productivity," MERIT Working Papers 2011-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Baumann, Julian & Kritikos, Alexander S., 2016. "The link between R&D, innovation and productivity: Are micro firms different?," Research Policy, Elsevier, vol. 45(6), pages 1263-1274.
    7. Lambie, Neil Ross, 2009. "The role of real options analysis in the design of a greenhouse gas emissions trading scheme," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47626, Australian Agricultural and Resource Economics Society.
    8. Senlin Hu & Gang Zeng & Xianzhong Cao & Huaxi Yuan & Bing Chen, 2021. "Does Technological Innovation Promote Green Development? A Case Study of the Yangtze River Economic Belt in China," IJERPH, MDPI, vol. 18(11), pages 1-18, June.
    9. Amaral, Afonso & Morgan, M. Granger & Mendonça, Joana & Fuchs, Erica R.H., 2023. "National core competencies and dynamic capabilities in times of crisis: Adaptive regulation of new entrants in advanced technology markets," Research Policy, Elsevier, vol. 52(4).
    10. Bernadette Marechal, 1996. "Research and development expenditure in France : an analysis by sector [Les dépenses de recherche-développement en France : une analyse par branche]," Working Papers hal-01526514, HAL.
    11. Karbowski Adam, 2016. "The Elasticity-Based Approach to Enterprise Innovation," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 49(1), pages 58-78, March.
    12. Burak Dindaroğlu, 2018. "Determinants of patent quality in U.S. manufacturing: technological diversity, appropriability, and firm size," The Journal of Technology Transfer, Springer, vol. 43(4), pages 1083-1106, August.
    13. David Devins & George Lodorfos & Ioannis Kostopoulos & Don Webber, 2017. "Innovation And Growth In The City Region: Microeconomic Evidence Of Asymmetries," World Scientific Book Chapters, in: Joe Tidd (ed.), Promoting Innovation in New Ventures and Small- and Medium-Sized Enterprises, chapter 1, pages 3-27, World Scientific Publishing Co. Pte. Ltd..
    14. Sumit Majumdar, 2011. "Scalability versus flexibility: firm size and R&D in Indian industry," The Journal of Technology Transfer, Springer, vol. 36(1), pages 101-116, February.
    15. Ansari, Shahzad (Shaz) & Krop, Pieter, 2012. "Incumbent performance in the face of a radical innovation: Towards a framework for incumbent challenger dynamics," Research Policy, Elsevier, vol. 41(8), pages 1357-1374.
    16. Wei Jin & ZhongXiang Zhang, 2014. "Explaining the Slow Pace of Energy Technological Innovation: Why Market Conditions Matter," CCEP Working Papers 1401, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    17. Marco Corsino & Giuseppe Espa & Rocco Micciolo, 2008. "R&D, firm size, and product innovation dynamics," DISA Working Papers 0803, Department of Computer and Management Sciences, University of Trento, Italy, revised 18 Jun 2008.
    18. Spielkamp, Alfred & Rammer, Christian, 2006. "Balanceakt Innovation: Erfolgsfaktoren im Innovationsmanagement kleiner und mittlerer Unternehmen," ZEW Dokumentationen 06-04, ZEW - Leibniz Centre for European Economic Research.
    19. Mainwaring, Lynn & Moore, Nigel J. & Murphy, Philip D., 2007. "A regional comparison of enterprise patent holdings: A study of British and Irish data," Research Policy, Elsevier, vol. 36(10), pages 1655-1665, December.
    20. Huo, Jingjing, 2015. "How Nations Innovate: The Political Economy of Technological Innovation in Affluent Capitalist Economies," OUP Catalogue, Oxford University Press, number 9780198735847.

    More about this item

    Keywords

    R&D; entry; barriers; competition;
    All these keywords.

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jfr:rwe111:v:6:y:2015:i:1:p:112-117. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gina Perry (email available below). General contact details of provider: http://rwe.sciedupress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.