Firms' Differential Innovative Success and Market Dynamics
AbstractThis paper deals with innovative activities of firms, the resulting market success as well as the interdependencies between both. In a first theoretical part, different cases of those interdependencies are investigated by the way of a simple model based on replicator dynamics. It is shown that the resulting differential success (in those activities) of firms in a market leads to specific characteristic pattern of industry dynamics. The second empirical part of the paper is used to get an account of the working of replicator dynamics mechanism within German manufacturing. Doing so changes in firms' market shares and the relation to their respective relative technological performance and to their or innovative performance are investigated with productivity levels as a proxy for technological performance and productivity changes as proxy for innovative performance.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-078.
Date of creation: 01 Nov 2007
Date of revision:
Innovation; market competition; replicator dynamics; productivity decomposition;
Find related papers by JEL classification:
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-10 (All new papers)
- NEP-BEC-2007-11-10 (Business Economics)
- NEP-CSE-2007-11-10 (Economics of Strategic Management)
- NEP-EFF-2007-11-10 (Efficiency & Productivity)
- NEP-ENT-2007-11-10 (Entrepreneurship)
- NEP-INO-2007-11-10 (Innovation)
- NEP-MIC-2007-11-10 (Microeconomics)
- NEP-TID-2007-11-10 (Technology & Industrial Dynamics)
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- Kox, Henk L.M. & Leeuwen, George van & Wiel, Henry van der, 2010. "Competitive, but too small - productivity and entry-exit determinants in European business services," MPRA Paper 24389, University Library of Munich, Germany.
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