Innovation and Competition in the Netherlands: Testing the Inverted-U for Industries and Firms |
| |
Authors: | Michael Polder Erik Veldhuizen |
| |
Institution: | (1) Statistics Netherlands, The Hague, Netherlands |
| |
Abstract: | Competition can be good or bad for innovation by firms. On the one hand it stimulates firms to innovate in order to escape
competition, on the other hand it hampers firms to reap additional profits from innovation. The recent literature has embraced
a model that describes an inverted-U shape relationship between competition and innovation at the industry-level. With the
Price Cost Margin and Profit Elasticity as measures of competition, we find evidence supporting this prediction using industry
data from the Dutch National Accounts. Moreover, we test the non-linear relation at the micro-level, with special attention
for the role of the distribution of technology within industries. We find evidence that there is a threshold for this ‘technology
spread’ at which the (marginal) effect of competition on innovation activity by firms turns from positive to negative. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|