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Competition and Persistence of R&D

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Abstract

This paper investigates the R&D persistence of R&D active firms in different markets with different intensities of competition, based on firm-level panel data for the period 1996-2008. In a dynamic setting of the empirical model it turns out that persistence is strongly related to market competition (measured by the number of principal competitors). Persistence of R&D expenditures is more likely to be observed in markets with few principal competitors (between 6 and 10) and is very unlikely to be observed in polypolistic type of markets (more than 50 competitors). These results call for a stronger coordination between competition policy and innovation promotion policy, since the former basically aims at larger markets with many competitors, while the latter aims at persistence of R&D efforts and thus markets with fewer competitors.

Suggested Citation

  • Martin Woerter, 2011. "Competition and Persistence of R&D," KOF Working papers 11-290, KOF Swiss Economic Institute, ETH Zurich.
  • Handle: RePEc:kof:wpskof:11-290
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    File URL: http://dx.doi.org/10.3929/ethz-a-006698629
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    Cited by:

    1. Rammer, Christian & Schubert, Torben, 2016. "Concentration on the few? R&D and innovation in German firms 2001 to 2013," ZEW Discussion Papers 16-005, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. repec:eee:respol:v:47:y:2018:i:2:p:379-389 is not listed on IDEAS
    3. Rammer, Christian & Schubert, Torben, 2016. "Concentration on the few? R&D and innovation in German firms between 2001 and 2013," Discussion Papers "Innovation Systems and Policy Analysis" 54, Fraunhofer Institute for Systems and Innovation Research (ISI).
    4. Spyros Arvanitis & Florian Seliger, 2014. "Imitation versus innovation," KOF Working papers 14-367, KOF Swiss Economic Institute, ETH Zurich.
    5. Isabel Busom & Beatriz Corchuelo & Ester Martínez-Ros, 2015. "Dynamics of firm participation in R&D tax credit and subsidy programs," Working Papers wpdea1503, Department of Applied Economics at Universitat Autonoma of Barcelona.
    6. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.
    7. repec:eee:respol:v:46:y:2017:i:9:p:1570-1579 is not listed on IDEAS

    More about this item

    Keywords

    R&D expenditures; Persistence; Innovation; Competition; Panel data; Empirical investigation;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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