Price Competition, Innovation and Profitability: Theory and UK Evidence
This paper examines the effect of price competition on innovation, market structure and profitability in R&D-intensive industries. The theoretical predictions are tested using UK data on the evolution of competition, concentration, innovation counts and profitability over 1952-1977. The econometric results suggest that the introduction of restrictive practices legislation in the UK had no significant effect on the number of innovations commercialised in previously cartelised R&D-intensive manufacturing industries, while it caused a significant rise in concentration in these industries. In the short run profitability decreased, but in the long run it was restored through the rise in concentration.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.essex.ac.uk/economics/
More information through EDIRC
|Order Information:|| Postal: Discussion Papers Administrator, Department of Economics, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, U.K.|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fershtman, Chaim & Gandal, Neil, 1994.
International Journal of Industrial Organization,
Elsevier, vol. 12(2), pages 141-154, June.
- Richard Blundell & Rachel Griffith & John Van Reenen, 1994.
"Dynamic count data models of technological innovation,"
IFS Working Papers
W94/10, Institute for Fiscal Studies.
- Blundell, Richard & Griffith, Rachel & Van Reenen, John, 1995. "Dynamic Count Data Models of Technological Innovation," Economic Journal, Royal Economic Society, vol. 105(429), pages 333-44, March.
- repec:cup:cbooks:9780521589826 is not listed on IDEAS
- Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1999.
"Competition, Financial Discipline and Growth,"
CEPR Discussion Papers
2128, C.E.P.R. Discussion Papers.
- Mathias Dewatripont & Philippe Aghion & Patrick Rey, 1999. "Competition, financial discipline and growth," ULB Institutional Repository 2013/9619, ULB -- Universite Libre de Bruxelles.
- Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1999. "Competition, Financial Discipline and Growth," Scholarly Articles 12490416, Harvard University Department of Economics.
- Schott, Kerry, 1976. "Investment in Private Industrial Research and Development in Britain," Journal of Industrial Economics, Wiley Blackwell, vol. 25(2), pages 81-99, December.
- Symeonidis, George, 2000.
"Price Competition and Market Structure: The Impact of Cartel Policy on Concentration in the UK,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 48(1), pages 1-26, March.
- Symeonidis, George, 1999. "Price Competition and Market Structure: The Impact of Cartel Policy on Concentration in the UK," CEPR Discussion Papers 2308, C.E.P.R. Discussion Papers.
- Ziss, Steffen, 1994. "Strategic R&D with Spillovers, Collusion and Welfare," Journal of Industrial Economics, Wiley Blackwell, vol. 42(4), pages 375-93, December.
- Robson, M. & Townsend, J. & Pavitt, K., 1988. "Sectoral patterns of production and use of innovations in the UK: 1945-1983," Research Policy, Elsevier, vol. 17(1), pages 1-14, February.
- Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
- Utterback, James M. & Suarez, Fernando F., 1993. "Innovation, competition, and industry structure," Research Policy, Elsevier, vol. 22(1), pages 1-21, February.
- Yarrow, G K, 1985. "Welfare Losses in Oligopoly and Monopolistic Competition," Journal of Industrial Economics, Wiley Blackwell, vol. 33(4), pages 515-29, June.
- Symeonidis, George, 2000. "Price Competition, Non-price Competition and the Market Structure: Theory and Evidence from the UK," Economica, London School of Economics and Political Science, vol. 67(267), pages 437-56, August.
- Chaim Fershtman & Eitan Muller, 1986. "Capital Investments and Price Agreements in Semicollusive Markets," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 214-226, Summer.
- Stephen Broadberry & Nicholas Crafts, 2000.
"Competition and innovation in 1950’s Britain,"
Economic History Working Papers
22381, London School of Economics and Political Science, Department of Economic History.
- Carl Davidson & Raymond Deneckere, 1984.
"Excess Capacity and Collusion,"
675, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Bertschek, Irene, 1995. "Product and Process Innovation as a Response to Increasing Import and Foreign Direct Investment," Journal of Industrial Economics, Wiley Blackwell, vol. 43(4), pages 341-57, December.
- S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
- repec:cup:cbooks:9780521589819 is not listed on IDEAS
- Jerry A. Hausman & Bronwyn H. Hall & Zvi Griliches, 1984.
"Econometric Models for Count Data with an Application to the Patents-R&D Relationship,"
NBER Technical Working Papers
0017, National Bureau of Economic Research, Inc.
- Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
- Geroski, P A, 1990. "Innovation, Technological Opportunity, and Market Structure," Oxford Economic Papers, Oxford University Press, vol. 42(3), pages 586-602, July.
- Klepper, Steven & Simons, Kenneth L, 1997. "Technological Extinctions of Industrial Firms: An Inquiry into Their Nature and Causes," Industrial and Corporate Change, Oxford University Press, vol. 6(2), pages 379-460, March.
- Sutton, John, 1996. "Technology and market structure," European Economic Review, Elsevier, vol. 40(3-5), pages 511-530, April.
- Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-90, September.
- George Symeonidis, 1996. "Innovation, Firm Size and Market Structure: Schumpeterian Hypotheses and Some New Themes," OECD Economics Department Working Papers 161, OECD Publishing.
- repec:cup:cbooks:9780521589833 is not listed on IDEAS
- repec:cup:cbooks:9780521771337 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:esx:essedp:530. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Essex Economics Web Manager)
If references are entirely missing, you can add them using this form.