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Innovation, Firm Size and Market Structure: Schumpeterian Hypotheses and Some New Themes

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George Symeonidis ()
Abstract

This paper surveys the empirical literature on the links between innovation, market structure and firm size. The review shows that there is little evidence in support of the Schumpeterian hypothesis that market power and large firms stimulate innovations: R&D spending seems to rise more or less proportionally with firm size after a certain threshold level has been passed, and there is little evidence of a positive relationship between R&D intensity and concentration in general. However, positive linkages between concentration/size and innovative activity can occur when certain conditions are met, including high sunk costs per individual project, economies of scale and scope in the production of innovation rents. Recent empirical work suggests that R&D intensity and market structure are jointly determined by technology, the characteristics of demand, the institutional framework, strategic interaction and chance ...


Cet article passe en revue la littérature empirique concernant les liens entre innovation, structure de marché et taille de l’entreprise. Il montre le manque de preuves en faveur des hypothèses schumpeteriennes selon lesquelles l’innovation serait stimulée par la puissance du marché et l’existence de grosses sociétés : les dépenses de R-D semblent croître de manière plus ou moins proportionnelle avec la taille de l’entreprise après qu’un certain seuil a été franchi, et peu de signes attestent d’une relation positive entre intensité de la R-D et concentration en général. Cependant, des liens positifs entre concentration/taille et activité innovante peuvent s’établir sous certaines conditions, parmi lesquelles l’existence de coûts fixes élevés par projet individuel, d’économies d’échelle et de gamme dans la production d’innovations, de contraintes financières, et de difficultés à s’approprier les rentes liées à l’innovation. Des travaux empiriques récents semblent indiquer que ...

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Paper provided by OECD Economics Department in its series OECD Economics Department Working Papers with number 161.

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Date of creation: 1996
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Handle: RePEc:oec:ecoaaa:161-en

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  1. Christine Greenhalgh & Padraig Dixon, 2002. "The Economics of Intellectual Property: A Review to Identify Themes for Future Research," Economics Series Working Papers 135, University of Oxford, Department of Economics. [Downloadable!]
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  2. Christine Greenhalgh & Mark Rogers, 2007. "The Value of Intellectual Property Rights to Firms," Economics Series Working Papers 319, University of Oxford, Department of Economics. [Downloadable!]
  3. Mark Rogers, 2003. "Competition, Agency and Productivity," Melbourne Institute Working Paper Series wp2003n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
    Other versions:
  4. Alberto BUCCI, 2004. "An inverted-U relationship between product market competition and growth in an extended Romerian model," Departemental Working Papers 2004-26, Department of Economics University of Milan Italy. [Downloadable!]
  5. Kelly Edmiston, 2004. "The small business role in economic development," Community Affairs Research Working Paper 2005-01, Federal Reserve Bank of Kansas City. [Downloadable!]
  6. Mark N. Harris & Mark Rogers & Anthony Siouclis, 2001. "Modelling Firm Innovation using Panel Probit Estimators," Melbourne Institute Working Paper Series wp2001n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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  7. Patrizio Pagano & Fabiano Schivardi, 2001. "Firm Size Distribution and Growth," Temi di discussione (Economic working papers) 394, Bank of Italy, Economic Research Department. [Downloadable!]
    Other versions:
  8. Mark Rogers, 2000. "Understanding Innovative Firms: An Empirical Analysis of the GAPS," Melbourne Institute Working Paper Series wp2000n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  9. Robin Cowan, 2002. "On the Number of Firms and the Quantity of Innovation," Economics Bulletin, Economics Bulletin, vol. 12, pages 1-9. [Downloadable!]
  10. Mark Rogers, 2006. "R&D and Productivity in the UK: evidence from firm-level data in the 1990s," Economics Series Working Papers 255, University of Oxford, Department of Economics. [Downloadable!]
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