Competitive Pressure and the Adoption of Complementary Innovations
AbstractLiberalization of the European automobile distribution system in 2002 limits the ability of manufacturers to impose vertical restraints, leading to a substantial increase in competitive pressure among dealers. We estimate an equilibrium model of profit maximization to evaluate how dealers change their innovation adoption strategies following the elimination of exclusive territories. Using French data we evaluate the existence of complementarities between the adoption of software applications and the scale of production. Firms view these innovations as substitutes and concentrate their effort in one type of software as they expand their scale of production. Results are robust to the existence of unobserved heterogeneity.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8289.
Date of creation: Mar 2011
Date of revision:
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Other versions of this item:
- Tobias Kretschmer & Eugenio J. Miravete & Jose C. Pernias, 2012. "Competitive Pressure and the Adoption of Complementary Innovations," American Economic Review, American Economic Association, vol. 102(4), pages 1540-70, June.
- Tobias Kretschmer & Eugenio Miravete & José Pernías, 2009. "Competitive Pressure and the Adoption of Complementary Innovations," Working Papers 09-22, NET Institute, revised Sep 2009.
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-19 (All new papers)
- NEP-COM-2011-03-19 (Industrial Competition)
- NEP-CSE-2011-03-19 (Economics of Strategic Management)
- NEP-EUR-2011-03-19 (Microeconomic European Issues)
- NEP-INO-2011-03-19 (Innovation)
- NEP-IPR-2011-03-19 (Intellectual Property Rights)
- NEP-TID-2011-03-19 (Technology & Industrial Dynamics)
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