Competition and Persistence of R&D
AbstractThis paper investigates the R&D persistence of R&D active firms in different markets with different intensities of competition, based on firm-level panel data for the period 1996-2008. In a dynamic setting of the empirical model it turns out that persistence is strongly related to market competition (measured by the number of principal competitors). Persistence of R&D expenditures is more likely to be observed in markets with few principal competitors (between 6 and 10) and is very unlikely to be observed in polypolistic type of markets (more than 50 competitors). These results call for a stronger coordination between competition policy and innovation promotion policy, since the former basically aims at larger markets with many competitors, while the latter aims at persistence of R&D efforts and thus markets with fewer competitors.
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Bibliographic InfoPaper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 11-290.
Length: 27 pages
Date of creation: Nov 2011
Date of revision:
R&D expenditures; Persistence; Innovation; Competition; Panel data; Empirical investigation;
Find related papers by JEL classification:
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
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