Innovation dynamics and endogenous market structure: econometric results from aggregated survey data
AbstractThis paper examines empirically the relationship between innovation and market structure within a simultaneous framework at the industry level of aggregation. We use a model in which R&D affects both, demand and cost conditions. An optimization process leads to optimal industry R&D expenditure and market structure in a symmetric equilibrium. The model is applied to a newly constructed panel for Germany. Generalized Method of Moments (GMM) estimation techniques for dynamic panel data systems are used to estimate the parameters of interest. We found a positive long?run effect of R&D on markets? sales concentration. In contrast, competition enforces innovation, i.e. sales concentration has a negative impact on R&D. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 01-39.
Date of creation: 2001
Date of revision:
innovation; R&D; market structure; panel data; dynamic models; applied econometrics;
Find related papers by JEL classification:
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
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