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The effect of innovation activity on innovating quasi-rents: an empirical application

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  • Ester Martínez Ros
  • Vicente Salas Fum·s

Abstract

This paper investigates whether innovations generate quasi-rents and whether the size of those quasi-rents are affected by market conditions. Using a panel data of Spanish manufacturing firms during the period 1990-93 we answer affinnatevely to both questions. Product, process and both innovations generate quasi rents and such quasirents appears to be higher for process innovations. The size of innovation quasi-rents seems to be affected positively by demand growth, by product standarisation, and by low product market concentration. The three empirical results are in agreement with the theoretical predictions such as the Schmoockler' s theory of demandpool innovation, the price-elasticity of demand effects of Kamien and Schwartz and the replacement effect of Arrow. Process innovations are more affected by market conditions than the rest of innovations, at the tine of generating quasi-rents.
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  • Ester Martínez Ros & Vicente Salas Fum·s, "undated". "The effect of innovation activity on innovating quasi-rents: an empirical application," Studies on the Spanish Economy 03, FEDEA.
  • Handle: RePEc:fda:fdaeee:03
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