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Markets, Competition, Cooperation and Innovation


  • M Kitson
  • J Michie
  • M Quinn



The paper analyses the relationship between, on the one hand, markets, competition and cooperation, and on the other hand, firms' innovative behaviour. Drawing on ESRC Centre for Business Research survey results, the paper uses descriptive statistics and a qualitative response model to examine these relationships. Most firms face a relatively small number of major competitors. Non-price competition (or higher order qualitive competition) is ranked as more significant than price. We test formally for the relationships between competition, inter-firm cooperation and innovation. Our results indicate that a high level of domestic competition is positively correlated with the probability of innovating. In addition, inter-firm cooperation is found to be positively correlated with firms' probability of innovating. These results suggest that it is not just the degree of competition that is important but also the nature of the competitive process. Aspects of financial market pressure such as a take-over bid are found to be negatively correlated with the probability of innovating, especially in relation to product innovation.

Suggested Citation

  • M Kitson & J Michie & M Quinn, 2001. "Markets, Competition, Cooperation and Innovation," Working Papers wp212, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp212
    Note: PRO-1

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    Cited by:

    1. Thelma Quince & Hugh Whittaker, 2002. "High Tech Businesses in the UK: performance and niche markets," Working Papers wp234, Centre for Business Research, University of Cambridge.

    More about this item


    innovation; corporate performance; competitive environment; collaboration;

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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