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A Theory of Innovation: Market Transition, Property Rights, and Innovative Activity

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  • Victor Nee
  • Jeong-han Kang
  • Sonja Opper
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    Abstract

    The aim of this paper is to specify a theory to explain why transitions to a market economy cause a shift to a higher level of innovation. Marketization increases the power of economic actors relative to political actors, increases inter-firm competition, creates new opportunities for entrepreneurship, and subsequently motivates innovative activity. For our empirical application, we focus on China's transition economy, which offers a broad range of institutional environments to examine the relation between market transition and increasing innovative activity by entrepreneurs and firms.

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    Bibliographic Info

    Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

    Volume (Year): 166 (2010)
    Issue (Month): 3 (September)
    Pages: 397-425

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    Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201009)166:3_397:atoimt_2.0.tx_2-d

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