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Defensive strategies in quality ladders

  • Ledezma, Ivan

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.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165188912001613
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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 37 (2013)
Issue (Month): 1 ()
Pages: 176-194

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Handle: RePEc:eee:dyncon:v:37:y:2013:i:1:p:176-194
Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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  27. Park, Walter G., 2008. "International patent protection: 1960-2005," Research Policy, Elsevier, vol. 37(4), pages 761-766, May.
  28. Malerba, Franco & Orsenigo, Luigi & Peretto, Pietro, 1997. "Persistence of innovative activities, sectoral patterns of innovation and international technological specialization," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 801-826, October.
  29. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-91, December.
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