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How does firms' perceived competition affect technological innovation in Luxembourg?

Author

Listed:
  • Raymond W.
  • Plotnikova T.

    (UNU-MERIT)

Abstract

This paper revisits the competition-innovation relationship using an unbalanced panel of enterprise data stemming from four waves of the Luxembourgish innovation survey for the period 2002-2010. We estimate by full-information maximum likelihood a nonlinear dynamic simultaneous-equations model with pseudo-fixed effects using four measures of perceived competition and three indicators of innovation and find that firms whose main market is characterised by rapid obsolescence of products are more likely to spend on innovation and to introduce product or process innovations. We also find that these firms also often consider their main market to be characterised by rapidly-changing technologies where higher competition also implies higher innovation.

Suggested Citation

  • Raymond W. & Plotnikova T., 2015. "How does firms' perceived competition affect technological innovation in Luxembourg?," MERIT Working Papers 001, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2015001
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    File URL: https://www.merit.unu.edu/publications/wppdf/2015/wp2015-001.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Multiple or Simultaneous Equation Models; Panel Data; Longitudinal Data; Spatial Time Series; Multiple or Simultaneous Equation Models; Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Innovation and Invention; Management of Technological Innovation and R&D; Technological Change; Government Policy;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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