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Market Size and Number of Firms with New Technology

Author

Listed:
  • Sugata Marjit
  • Krishnendu Ghosh Dastidar
  • Gouranga Gopal Das

Abstract

In this paper, unlike the conventional wisdom, we demonstrate that the relationship between the size of the market and number of firms would be non-monotonic. While moderate rise in the size would force the local firms to exit and only the foreign firm rules, substantial rise in the size would accommodate all firms. Also, the possibility of survival increases if the local firms could differentiate their product more and then we drift towards the conventional result.

Suggested Citation

  • Sugata Marjit & Krishnendu Ghosh Dastidar & Gouranga Gopal Das, 2022. "Market Size and Number of Firms with New Technology," CESifo Working Paper Series 9934, CESifo.
    • Handle: RePEc:ces:ceswps:_9934
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp9934.pdf
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    References listed on IDEAS

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    1. Klein, Michael A., 2022. "Patents, trade secrets and international technology transfer," Economics Letters, Elsevier, vol. 210(C).
    2. Mukherjee, Arijit, 2022. "Merger and process innovation," Economics Letters, Elsevier, vol. 213(C).
    3. Amy Jocelyn Glass & Kamal Saggi, 2002. "Multinational Firms and Technology Transfer," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 495-513, December.
    4. Howard Pack & Kamal Saggi, 1997. "Inflows of Foreign Technology and Indigenous Technological Development," Review of Development Economics, Wiley Blackwell, vol. 1(1), pages 81-98, February.
    5. Han Tien-Der & Haque M. Emranul & Mukherjee Arijit, 2022. "Social Efficiency of Entry in an Open Economy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 22(1), pages 203-219, January.
    6. Marjit, Sugata & Beladi, Hamid & Kabiraj, Tarun, 2007. "Brand name collaboration and optimal tariff," Economic Modelling, Elsevier, vol. 24(4), pages 636-647, July.
    7. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    8. Chang, Ray-Yun & Hwang, Hong & Peng, Cheng-Hau, 2013. "Technology licensing, R&D and welfare," Economics Letters, Elsevier, vol. 118(2), pages 396-399.
    9. Saggi, Kamal, 1999. "Foreign Direct Investment, Licensing, and Incentives for Innovation," Review of International Economics, Wiley Blackwell, vol. 7(4), pages 699-714, November.
    10. Marjit, Sugata & Beladi, Hamid, 1999. "Technology adoption and LDC firms," Research in Economics, Elsevier, vol. 53(4), pages 421-429, December.
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    Cited by:

    1. Marjit, Sugata & Das, Gouranga G., 2023. "Where have all Tech Layoffs gone? A Model of Two Worker Types with Outsourcing," GLO Discussion Paper Series 1338, Global Labor Organization (GLO).
    2. Sugata Marjit & Gouranga G. Das, 2023. "Where Have All Tech Layoffs Gone? A Model of Two Worker Types with Outsourcing," CESifo Working Paper Series 10686, CESifo.

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    More about this item

    Keywords

    product differentiation; free entry; Cournot; output; market size; technology; FDI;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • F10 - International Economics - - Trade - - - General

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