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Market Structure and Innovation Races / Marktstruktur und Innovationsrennen: An Empirical Assessment Using Indirect Inference / Eine empirische Untersuchung mit Hilfe der indirekten Schätzmethode

Author

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  • Kukuk Martin

    () (Lehrstuhl für Ökonometrie, Universität Würzburg, Sanderring 2,D-97070, Würzburg, Germany)

  • Stadler Manfred

    () (Lehrstuhl für Volkswirtschaftslehre, Eberhard Karls UniversitätTübingen, Mohlstr. 36, D-72074 Tübingen, Germany)

Abstract

Based on an extended game-theoretic innovation-race model, we derive some Schumpeterian hypotheses of the impact of technological rivalry, market power, technological opportunities and demand expectations on the timing of product and process innovations. Using innovation data at the firm level in the German industrial sector, we estimate various versions of an econometric specification of the model with dichotomous innovation data by using a univariate binary probit model with qualitative regressor variables estimated applying indirect inference. Our empirical results are consistent with the derived hypotheses that intense rivalry, favorable technological opportunities and high demand expectations spur innovative activity, while the effect of market power is ambiguous.

Suggested Citation

  • Kukuk Martin & Stadler Manfred, 2005. "Market Structure and Innovation Races / Marktstruktur und Innovationsrennen: An Empirical Assessment Using Indirect Inference / Eine empirische Untersuchung mit Hilfe der indirekten Schätzmethode," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 225(4), pages 427-440, August.
  • Handle: RePEc:jns:jbstat:v:225:y:2005:i:4:p:427-440
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    References listed on IDEAS

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    1. Flavio Delbono & Vincenzo Denicolo, 1991. "Incentives to Innovate in a Cournot Oligopoly," The Quarterly Journal of Economics, Oxford University Press, pages 951-961.
    2. Kofi O. Nti, 1999. "Stability in the patent race contest of Lee and Wilde," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 237-245.
    3. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
    4. Martin Kukuk & Manfred Stadler, 2001. "Financing Constraints and the Timing of Innovations in the German Services Sector," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, pages 277-292.
    5. Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, Oxford University Press, vol. 94(2), pages 429-436.
    6. Terza, Joseph V., 1987. "Estimating linear models with ordinal qualitative regressors," Journal of Econometrics, Elsevier, vol. 34(3), pages 275-291, March.
    7. Flaig, Gebhard & Stadler, Manfred, 1994. "Success Breeds Success. The Dynamics of the Innovation Process," Empirical Economics, Springer, pages 55-68.
    8. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 395-410.
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    Cited by:

    1. Cantner, Uwe & Rake, Bastian, 2014. "International research networks in pharmaceuticals: Structure and dynamics," Research Policy, Elsevier, pages 333-348.
    2. Güth, Werner & Pull, Kerstin & Stadler, Manfred, 2012. "Creativity, analytical skills, personality traits, and innovative capability: A lab experiment," University of Tuebingen Working Papers in Economics and Finance 44, University of Tuebingen, Faculty of Economics and Social Sciences.
    3. Aschhoff, B. & Crass, D. & Doherr, T. & Hud, M. & Hünermund, P. & Iferd, Y. & Köhler, C. & Peters, B. & Rammer, C. & Schubert, T. & Schwiebacher, F., 2014. "Dokumentation zur Innovationserhebung 2013," ZEW Dokumentationen 14-01, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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