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Firms' Differential Innovative Success and Market Dynamics


  • Uwe Cantner

    () (Friedrich Schiller University Jena, Faculty of Economics and Business Administration)


This paper deals with innovative activities of firms, the resulting market success as well as the interdependencies between both. In a first theoretical part, different cases of those interdependencies are investigated by the way of a simple model based on replicator dynamics. It is shown that the resulting differential success (in those activities) of firms in a market leads to specific characteristic pattern of industry dynamics. The second empirical part of the paper is used to get an account of the working of replicator dynamics mechanism within German manufacturing. Doing so changes in firms' market shares and the relation to their respective relative technological performance and to their or innovative performance are investigated with productivity levels as a proxy for technological performance and productivity changes as proxy for innovative performance.

Suggested Citation

  • Uwe Cantner, 2007. "Firms' Differential Innovative Success and Market Dynamics," Jena Economic Research Papers 2007-078, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2007-078

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    References listed on IDEAS

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    5. Anselin, Luc & Varga, Attila & Acs, Zoltan, 1997. "Local Geographic Spillovers between University Research and High Technology Innovations," Journal of Urban Economics, Elsevier, vol. 42(3), pages 422-448, November.
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    11. Kuemmerle, Walter, 2002. "Home base and knowledge management in international ventures," Journal of Business Venturing, Elsevier, vol. 17(2), pages 99-122, March.
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    Cited by:

    1. Kox, Henk L.M. & Leeuwen, George van & Wiel, Henry van der, 2010. "Competitive, but too small - productivity and entry-exit determinants in European business services," MPRA Paper 24389, University Library of Munich, Germany.

    More about this item


    Innovation; market competition; replicator dynamics; productivity decomposition;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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