Competition, Innovation and Distance to Frontier
AbstractAccording to a recent literature, the positive effect of competition is supposed to be growing with the proximity to the technological frontier. Using a variety of indicators, the paper tests the effect of competition and regulation on innovative activity measured by patenting. The sample consists of a panel of 15 industries for 17 OECD countries over the period 1979-2003. Results show no evidence of a positive effect of competition growing with the proximity to the frontier. Two main configurations emerge. First, regulation has a positive effect whatever the distance to the frontier and the magnitude of its impact is higher the closer the industry is to the frontier. Second, the effect of regulation is negative far from the frontier and becomes positive (or non significant) when the technology gap decreases. These results contradict the belief in the innovation-boosting effect of product market deregulation such as taken into account in the Lisbon Strategy.
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Date of creation: Jul 2008
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Innovation; competition; distance to frontier.;
Other versions of this item:
- Amable, Bruno & Demmou, Lila & Lezdema, Ivan, 2007. "Competition, Innovation and Distance to Frontier," CEPREMAP Working Papers (Docweb) 0706, CEPREMAP.
- Bruno Amable & Lilas Demmou & Ivan Ledezma, 2008. "Competition, innovation and distance to frontier," Documents de travail du Centre d'Economie de la Sorbonne r08064, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
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