IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/5394.html
   My bibliography  Save this paper

Innovation dynamics and endogenous market structure: econometric results from aggregated survey data

Author

Listed:
  • Gottschalk, Sandra
  • Janz, Norbert

Abstract

This paper examines empirically the relationship between innovation and market structure within a simultaneous framework at the industry level of aggregation. We use a model in which R&D affects both, demand and cost conditions. An optimization process leads to optimal industry R&D expenditure and market structure in a symmetric equilibrium. The model is applied to a newly constructed panel for Germany. Generalized Method of Moments (GMM) estimation techniques for dynamic panel data systems are used to estimate the parameters of interest. We found a positive long?run effect of R&D on markets? sales concentration. In contrast, competition enforces innovation, i.e. sales concentration has a negative impact on R&D.

Suggested Citation

  • Gottschalk, Sandra & Janz, Norbert, 2001. "Innovation dynamics and endogenous market structure: econometric results from aggregated survey data," ZEW Discussion Papers 01-39, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5394
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/24461/1/dp0139.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    2. Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 429-436.
    3. Holtz-Eakin, Douglas, 1988. "Testing for individual effects in autoregressive models," Journal of Econometrics, Elsevier, vol. 39(3), pages 297-307, November.
    4. Harhoff, Dietmar, 1997. "Innovationsanreize in einem strukturellen Oligopolmodell," ZEW Discussion Papers 97-16, ZEW - Leibniz Centre for European Economic Research.
    5. Richard Levin & Peter C. Reiss, 1984. "Tests of a Schumpeterian Model of R&D and Market Structure," NBER Chapters, in: R&D, Patents, and Productivity, pages 175-208, National Bureau of Economic Research, Inc.
    6. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Michael Peneder & Martin Woerter, 2014. "Competition, R&D and innovation: testing the inverted-U in a simultaneous system," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 653-687, July.
    2. Bersch, Johannes & Wagner, Simona & Berger, Marius & Friedrich, Max, 2018. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2016: Gründungen und Schließungen von Unternehmen, Gründungsdynamik in den Bundesländern, Internationaler Vergleich, Wagniskapital-Investiti," Studien zum deutschen Innovationssystem 3-2018, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    3. Lee, Chang-Yang, 2009. "Competition favors the prepared firm: Firms' R&D responses to competitive market pressure," Research Policy, Elsevier, vol. 38(5), pages 861-870, June.
    4. Rammer, Christian & Costard, Jano & Seliger, Florian & Schubert, Torben, 2008. "Bestimmungsgründe des Innovationserfolgs von baden-württembergischen KMU," ZEW Dokumentationen 08-05, ZEW - Leibniz Centre for European Economic Research.
    5. Bersch, Johannes & Murmann, Simona, 2023. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2021: Gründungen und Schließungen von Unternehmen, Gründungsdynamik in den Bundesländern, Internationaler Vergleich, Wagniskapital-Investiti," Studien zum deutschen Innovationssystem 3-2023, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    6. Wittkopp, Antje, 2002. "Marktstruktur, Innovationsaktivität und Profitabilität der deutschen Ernährungswirtschaft: Das Beispiel Functional Food," FE Working Papers 0205, Christian-Albrechts-University of Kiel, Department of Food Economics and Consumption Studies.
    7. Spyros Arvanitis & Juliette von Arx, 2004. "Innovation und Wettbewerb - Eine Analyse aufgrund von schweizerischen Unternehmensdaten," KOF Working papers 04-84, KOF Swiss Economic Institute, ETH Zurich.
    8. Müller, Bettina & Bersch, Johannes & Niefert, Michaela & Rammer, Christian, 2013. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2011: Gründungen und Schließungen von Unternehmen – Internationaler Vergleich – Beschäftigungsbeitrag von Gründungen – Vergleich von Datenqu," Studien zum deutschen Innovationssystem 4-2013, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    9. Tobias Stucki & Martin Woerter, 2019. "Competitive Pressure and Diversification into Green R&D," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(2), pages 301-325, September.
    10. Bersch, Johannes & Berger, Marius & Füner, Lena, 2022. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2020: Gründungen und Schließungen von Unternehmen, Gründungsdynamik in den Bundesländern, Internationaler Vergleich, Wagniskapital-Investiti," Studien zum deutschen Innovationssystem 3-2022, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    11. Müller, Bettina & Gottschalk, Sandra & Niefert, Michaela & Rammer, Christian, 2014. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2012: Gründungen und Schließungen von Unternehmen – Gründungsdynamik in den Bundesländern – Internationaler Vergleich," Studien zum deutschen Innovationssystem 3-2014, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    12. Bersch, Johannes & Berger, Marius & Egeln, Jürgen, 2020. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2018: Gründungen und Schließungen von Unternehmen, Gründungsdynamik in den Bundesländern, Internationaler Vergleich, Wagniskapital-Investiti," Studien zum deutschen Innovationssystem 3-2020, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    13. Katja Görlitz & Joel Stiebale, 2011. "The Impact of Product Market Competition on Employers’ Training Investments. Evidence from German Establishment Panel Data," De Economist, Springer, vol. 159(1), pages 1-23, March.
    14. Bersch, Johannes & Gottschalk, Sandra & Müller, Bettina & Wagner, Simona & Weiß, Anna, 2016. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2014: Gründungen und Schließungen von Unternehmen, Gründungsdynamik in den Bundesländern, internationaler Vergleich, Akquisition von jungen ," Studien zum deutschen Innovationssystem 3-2016, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    15. Rammer, Christian & Metzger, Georg, 2010. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland und im internationalen Vergleich," Studien zum deutschen Innovationssystem 10-2010, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    16. Müller, Bettina & Rammer, Christian & Gottschalk, Sandra, 2012. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2010: Gründungen und Schließungen von Unternehmen. Internationaler Vergleich," Studien zum deutschen Innovationssystem 7-2012, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    17. Rammer, Christian, 2007. "Unternehmensdynamik in den forschungsund wissensintensiven Wirtschaftszweigen in Deutschland: Zur Entwicklung von Gründungen und Schließungen bis im internationalen Vergleich 1995-2006," Studien zum deutschen Innovationssystem 5-2008, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    18. Müller, Bettina & Niefert, Michaela & Rammer, Christian & Gottschalk, Sandra, 2011. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2009: Gründungen und Schließungen von Unternehmen. Unternehmensdynamik in den Bundesländern. Internationaler Vergleich," Studien zum deutschen Innovationssystem 10-2011, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bansal, Ravi & Kiku, Dana & Yaron, Amir, 2016. "Risks for the long run: Estimation with time aggregation," Journal of Monetary Economics, Elsevier, vol. 82(C), pages 52-69.
    2. Paulo M. D. C. Parente & Richard J. Smith, 2021. "Quasi‐maximum likelihood and the kernel block bootstrap for nonlinear dynamic models," Journal of Time Series Analysis, Wiley Blackwell, vol. 42(4), pages 377-405, July.
    3. Carlos Medel, 2017. "Forecasting Chilean inflation with the hybrid new keynesian Phillips curve: globalisation, combination, and accuracy," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 20(3), pages 004-050, December.
    4. Hansen, Lars Peter & Heaton, John & Luttmer, Erzo G J, 1995. "Econometric Evaluation of Asset Pricing Models," Review of Financial Studies, Society for Financial Studies, vol. 8(2), pages 237-274.
    5. Graham Elliott & Ivana Komunjer & Allan Timmermann, 2008. "Biases in Macroeconomic Forecasts: Irrationality or Asymmetric Loss?," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 122-157, March.
    6. Asai, Manabu & McAleer, Michael, 2015. "Leverage and feedback effects on multifactor Wishart stochastic volatility for option pricing," Journal of Econometrics, Elsevier, vol. 187(2), pages 436-446.
    7. Bertrand, Olivier & Zuniga, Pluvia, 2006. "R&D and M&A: Are cross-border M&A different? An investigation on OECD countries," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 401-423, March.
    8. Fry-McKibbin, Renée A. & Wanaguru, Sumila, 2013. "Currency intervention: A case study of an emerging market," Journal of International Money and Finance, Elsevier, vol. 37(C), pages 25-47.
    9. Bollerslev, Tim & Gibson, Michael & Zhou, Hao, 2011. "Dynamic estimation of volatility risk premia and investor risk aversion from option-implied and realized volatilities," Journal of Econometrics, Elsevier, vol. 160(1), pages 235-245, January.
    10. Bekaert, Geert & Engstrom, Eric & Grenadier, Steven R., 2010. "Stock and bond returns with Moody Investors," Journal of Empirical Finance, Elsevier, vol. 17(5), pages 867-894, December.
    11. Dungey, M. H., 1999. "Decomposing exchange rate volatility around the Pacific Rim," Journal of Asian Economics, Elsevier, vol. 10(4), pages 525-535.
    12. Campbell Leith & Jim Malley, 2007. "A Sectoral Analysis of Price-Setting Behavior in U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 335-342, May.
    13. Geoffrey Booth, G. & Ciner, Cetin, 1997. "International transmission on information in corn futures markets," Journal of Multinational Financial Management, Elsevier, vol. 7(3), pages 175-187, October.
    14. Brockman, Paul & Chung, Dennis Y., 2000. "An empirical investigation of trading on asymmetric information and heterogeneous prior beliefs," Journal of Empirical Finance, Elsevier, vol. 7(5), pages 417-454, December.
    15. Akbar, Muhammad & Ahmad, Eatzaz, 2021. "Repercussions of exchange rate depreciation on the economy of Pakistan: Simulation analysis using macroeconometric model," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 574-600.
    16. Garcia, Rene & Bonomo, Marco, 2001. "Tests of conditional asset pricing models in the Brazilian stock market," Journal of International Money and Finance, Elsevier, vol. 20(1), pages 71-90, February.
    17. Aleksejs Krecetovs & Pasquale Della Corte, 2016. "Macro uncertainty and currency premia," 2016 Meeting Papers 624, Society for Economic Dynamics.
    18. Geert Bekaert & Seonghoon Cho & Antonio Moreno, 2010. "New Keynesian Macroeconomics and the Term Structure," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(1), pages 33-62, February.
    19. Delcoure, Natalya & Zhong, Maosen, 2007. "On the premiums of iShares," Journal of Empirical Finance, Elsevier, vol. 14(2), pages 168-195, March.
    20. Dumas, Bernard & Solnik, Bruno, 1995. "The World Price of Foreign Exchange Risk," Journal of Finance, American Finance Association, vol. 50(2), pages 445-479, June.

    More about this item

    Keywords

    innovation; R&D; market structure; panel data; dynamic models; applied econometrics;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    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:zbw:zewdip:5394. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    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.