Competition and Innovation: An inverted-U relationship using Japanese industry data
AbstractThis study replicates a model of Aghion et al. ("Competition and Innovation: An inverted-u relationship," Quarterly Journal of Economics 2005; 120(2):701-728), which suggests that an inverted-U relationship exists between competition and innovation. We apply patent data and a competition measure based on Japanese firm-level and industry-average data from 1964 to 2006. In a constant slope model using a full dataset, we find the same inverted-U relationship as did Aghion-Bloom-Blundell-Griffith-Howitt (ABBGH). In decade and industry fixed-effects slope models, we find the inverted-U relationship to be fragile.
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Bibliographic InfoPaper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 13062.
Length: 46 pages
Date of creation: Jul 2013
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-15 (All new papers)
- NEP-COM-2013-07-15 (Industrial Competition)
- NEP-IND-2013-07-15 (Industrial Organization)
- NEP-INO-2013-07-15 (Innovation)
- NEP-URE-2013-07-15 (Urban & Real Estate Economics)
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