IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-03511763.html

How does competition affect innovation behaviour in french firms?

Author

Listed:
  • Benoit Mulkay

    (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier)

Abstract

This paper investigates the relationship between competition and innovation at the firm level. Recent papers (Aghion et al., 2005; Askenazy et al., 2013; Rafique Hashmi, 2013) advocate a non-linear relationship, conciliating the Schumpeterian and Arrowian views. In this paper, the effect of competition on innovation is studied at the firm level using a large dataset for France coming from the annual surveys on R&D, covering the period 2000-2013, where a dummy variable is available for product or process innovation. The econometric results do not confirm the inverted-U shape relationship between the Lerner index and innovation, found by Aghion et al. (2005). This may be due to the use of firm-level data rather than industry-level data. However, for most firms, there is a negative effect of competition on innovation, meaning that more competition in the industry or a small market share has a negative effect on the propensity to innovate, either in products or processes, and the effect seems to be slightly stronger for product than for process innovation.

Suggested Citation

  • Benoit Mulkay, 2019. "How does competition affect innovation behaviour in french firms?," Post-Print hal-03511763, HAL.
    • Handle: RePEc:hal:journl:hal-03511763
    DOI: 10.1016/j.strueco.2019.05.003
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roper, Stephen & Bourke, Jane, 2022. "Innovating into trouble: When innovation leads to customer complaints," Research Policy, Elsevier, vol. 51(10).
    2. Adrián Rodríguez Valle & Esteban Fernández-Vázquez, 2023. "Estimating market power for the European manufacturing industry between 2000 and 2014," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(1), pages 141-172, February.
    3. Samuel Kwesi Dunyo & Samuel Amponsah Odei, 2023. "Firm-Level Innovations in an Emerging Economy: Do Perceived Policy Instability and Legal Institutional Conditions Matter?," Sustainability, MDPI, vol. 15(2), pages 1-24, January.
    4. Burlina, Chiara & Biscione, Antonella & Caruso, Raul, 2025. "Does training explain innovation in transition economies?," Structural Change and Economic Dynamics, Elsevier, vol. 73(C), pages 486-501.
    5. Mauricio Canêdo Pinheiro & Filipe Lage Sousa, 2025. "Is there an inverted-U relationship between competition and innovation in Brazil?," Economics Bulletin, AccessEcon, vol. 45(3), pages 1406-1420.
    6. Pierre Courtioux & François Métivier & Antoine Rebérioux, 2021. "The private return of R&D tax credit," Documents de travail du Centre d'Economie de la Sorbonne 21006, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    7. Zhang, Xiang & Zhou, Han, 2022. "The effect of market competition on corporate cash holdings: An analysis of corporate innovation and financial constraint," International Review of Financial Analysis, Elsevier, vol. 82(C).
    8. Feiyan Yang & Jiahui Ren & Junjie Yang & Yuchuan Zhang & Changyuan Xia, 2025. "Does property insurance promote corporate innovation? Evidence from China," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 50(1), pages 34-77, January.
    9. Zhang, Jianhong & Jiang, Jiangang, 2024. "Investment deregulation and innovation performance of Chinese private firms," Journal of Financial Stability, Elsevier, vol. 70(C).
    10. Alvarez, Lourdes & Huamaní, Edson & Coronado, Yngrid, 2020. "How Does Competition by Informal and Formal Firms Affect the Innovation and Productivity Performance in Peru? A CDM Approach," MPRA Paper 105332, University Library of Munich, Germany.
    11. Changjie Hu & Ming Liu, 2023. "Protect or Compete? Evidence of Firms’ Innovation from Import Penetration," JRFM, MDPI, vol. 16(4), pages 1-17, April.
    12. Keishun Suzuki, 2020. "Competition, patent protection, and innovation with heterogeneous firms in an endogenous market structure," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 729-750, June.
    13. Liu, Yunqiang & Liu, Sha & Shao, Xiaoyu & He, Yanqiu, 2022. "Policy spillover effect and action mechanism for environmental rights trading on green innovation: Evidence from China's carbon emissions trading policy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    14. Pu‐yan Nie & Yong‐cong Yang, 2023. "Innovation and competition with human capital input," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1779-1785, April.
    15. Xiao, Zumian & Wang, Shuhan & Zhang, Yepeng & Si, Deng-Kui, 2023. "Power of competition: Unraveling the impact of China's fair competition review system implementation on firm innovation," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1561-1581.
    16. Luca Farè, 2022. "Exploring the contribution of micro firms to innovation: does competition matter?," Small Business Economics, Springer, vol. 59(3), pages 1081-1113, October.
    17. Gan Jin & Günther G. Schulze, 2024. "The Long-Term Effect of Western Customs Institution on Firm Innovation in China," CESifo Working Paper Series 10967, CESifo.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-03511763. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.