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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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  1. Malerba, Franco & Orsenigo, Luigi, 1999. "Technological entry, exit and survival: an empirical analysis of patent data," Research Policy, Elsevier, vol. 28(6), pages 643-660, August.
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  12. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders and Product Cycles," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 557-586.
  13. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 43-61.
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  18. Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and innovation: an inverted U relationship," IFS Working Papers W02/04, Institute for Fiscal Studies.
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