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Market Structure, Firm Size and Innovation in Italy: An Integrated Approach to Testing Schumpeter

In: Recent Developments in the Theory of Industrial Organization

Author

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  • Niall O’Higgins
  • Patrizia Sbriglia

Abstract

In this chapter we examine the Schumpeterian hypothesis that concentrated markets act as a spur to industrial innovation, examining evidence for Italy over the period 1981–5. The central idea underlying our analysis is that the testing of the Schumpeterian hypothesis on market structure and innovation needs to be modified in order to take into account the possibility of different responses of small and large innovators to changes in market concentration, barriers to entry, technological opportunities and demand conditions. The existence of such differences would support the claim advanced by Acs and Audretsch (1988) that in asymmetric market structures small and large firms may respond to different technological and economic regimes, and more or less competition may have a different effect on their incentive to innovate.

Suggested Citation

  • Niall O’Higgins & Patrizia Sbriglia, 1992. "Market Structure, Firm Size and Innovation in Italy: An Integrated Approach to Testing Schumpeter," Palgrave Macmillan Books, in: Alfredo Monte (ed.), Recent Developments in the Theory of Industrial Organization, chapter 13, pages 293-312, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-11771-0_14
    DOI: 10.1007/978-1-349-11771-0_14
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