The Effect of Market Entry on Innovation: Evidence from UK University Incubators
AbstractThis paper investigates the effect of market entry of new firms on incumbent firms' innovative activity measured as patent applications. The basic assumption is that the effect of entry varies by geographical distance between entrants and incumbents due to the presence of localized unobserved spillovers. In order to avoid endogeneity problems commonly associated with the timing of entry and entrants' location choice, I analyze entry induced by the establishment of university business incubators, which are usefully exogenous in time and space. The results show that entry has a statistically and economically significantly positive strategic effect on incumbent patenting which is attenuated by the geographical distance between entrant and incumbent.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1002.
Date of creation: Sep 2010
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Patents; market entry; incubators; spillover;
Find related papers by JEL classification:
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-13 (All new papers)
- NEP-COM-2010-11-13 (Industrial Competition)
- NEP-ENT-2010-11-13 (Entrepreneurship)
- NEP-EUR-2010-11-13 (Microeconomic European Issues)
- NEP-INO-2010-11-13 (Innovation)
- NEP-IPR-2010-11-13 (Intellectual Property Rights)
- NEP-SBM-2010-11-13 (Small Business Management)
- NEP-TID-2010-11-13 (Technology & Industrial Dynamics)
- NEP-URE-2010-11-13 (Urban & Real Estate Economics)
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