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Innovative Efforts, Technological Opportunity And Changes In Market Structure In Italian Manufacturing

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  • Raffaele Paci
  • Stefano Usai

Abstract

Numerous attempts have been made to account for cross-industries differences in technological efforts; most of them have been accomplished along the lines of the structure-conduct-performance hypothesis. It is our purpose to reverse such an approach in the light of the latest theoretical and empirical contributions. We study the effects on the market structure of differences in firms' innovative effort within different technological environments, defined in terms both of the technological opportunity and of the appropriability of the innovations' returns. Results from a panel of Italian industrial sectors for the period 1978-1993 confirm previous evidence from other countries: technological efforts prove to have a negative impact on the level of concentration. Moreover, such a relationship may be modified depending on the technological conditions prevailing in each industry. The higher the potential knowledge available (better opportunity conditions), the lower the entry barriers and the more decentralising is the effect of technological activity. At the same time, the better the appropriability conditions, the more successfully innovative behaviour conveys greater quotas of the market, increasing its concentration.

Suggested Citation

  • Raffaele Paci & Stefano Usai, 1998. "Innovative Efforts, Technological Opportunity And Changes In Market Structure In Italian Manufacturing," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(4), pages 345-369.
    • Handle: RePEc:taf:ecinnt:v:7:y:1998:i:4:p:345-369
    DOI: 10.1080/10438599800000040
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    References listed on IDEAS

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    1. Nadiri, M Ishaq & Prucha, Ingmar R, 1996. "Estimation of the Depreciation Rate of Physical and R&D Capital in the U.S. Total Manufacturing Sector," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 43-56, January.
    2. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, April.
    3. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
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    1. Marc Escrihuela-Villar & Jorge Guillén, 2020. "Innovation and Competition in a Mixed Oligopoly," Hacienda Pública Española / Review of Public Economics, IEF, vol. 234(3), pages 59-74, September.

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    More about this item

    Keywords

    Market structure; Innovation; Technological opportunity; Italian manufacturing; JEL Classification: L11; O33;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • 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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