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Defensive strategies in quality ladders

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  • Ledezma, Ivan

Abstract

This paper analyses the potentially defensive behaviour of patent-race winners and the ensuing effect on aggregate R&D effort. We propose a quality-ladder model where leaders strategically acquire a technology advantage and are able to innovate. In this context, product-market regulation, by affecting this strategic behaviour, may have either a positive or negative effect on aggregate R&D intensity. The negative effect is likely to pertain in liberal markets, whereas the positive influence arises in more regulated environments, and can be stronger for larger jumps in innovation. These steady-state equilibrium outcomes are consistent with the puzzling patterns in data from manufacturing industries in 14 OECD countries over the 1987–2003 period.

Suggested Citation

  • Ledezma, Ivan, 2013. "Defensive strategies in quality ladders," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 176-194.
  • Handle: RePEc:eee:dyncon:v:37:y:2013:i:1:p:176-194
    DOI: 10.1016/j.jedc.2012.07.006
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    References listed on IDEAS

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    Cited by:

    1. Kiedaisch, Christian, 2015. "Intellectual property rights in a quality-ladder model with persistent leadership," European Economic Review, Elsevier, vol. 80(C), pages 194-213.
    2. Bruno AMABLE & Iván LEDEZMA, 2013. "Export Performance And Product Market Regulation," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 37, pages 231-258.
    3. Tatsuro Iwaisako & Kazuyoshi Ohki, 2015. "Innovation by Heterogeneous Leaders," Discussion Papers in Economics and Business 15-30, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    4. Amable, Bruno & Ledezma, Ivan & Robin, Stéphane, 2016. "Product market regulation, innovation, and productivity," Research Policy, Elsevier, vol. 45(10), pages 2087-2104.

    More about this item

    Keywords

    Innovative leaders; Quality ladders; Product market regulation; R&D;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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