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Buyer Power and Product Innovation: Empirical Evidence from the German Food Sector

Author

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  • Weiss, Christoph R.
  • Wittkopp, Antje

Abstract

Substantial increases in retail concentration (particularly in Europe) raise concerns about the welfare implications for consumers. In a formal model, we argue that retailer market power reduces upstream firms incentives to introduce new products. On the basis of a survey of firms in German food manufacturing, the results of a negative binomial regression model supports the proposition of a detrimental effect of retailer market power on product innovations. This effect is mitigated if manufacturing firms also have some market power (countervailing power). Innovations are positively related to firm?s market share in food manufacturing.

Suggested Citation

  • Weiss, Christoph R. & Wittkopp, Antje, 2003. "Buyer Power and Product Innovation: Empirical Evidence from the German Food Sector," FE Working Papers 0303, Christian-Albrechts-University of Kiel, Department of Food Economics and Consumption Studies.
    • Handle: RePEc:zbw:caufew:0303
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    Cited by:

    1. Kubitzki, Sabine & Anders, Sven M., 2005. "Branchenspezifische Besonderheiten im Innovationsverhalten des Ernährungsgewerbes: Eine empirische Analyse des Mannheimer Innovationspanels," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 54(02), pages 1-11.

    More about this item

    Keywords

    Retailer market power; product innovation; food manufacturing;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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