The Effect of Entry on R&D Investment of Leaders : Theory and Empirical Evidence

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URL:	http://ub-madoc.bib.uni-mannheim.de/2145
URN:	urn:nbn:de:bsz:180-madoc-21455
Document Type:	Working paper
Year of publication:	2008
The title of a journal, publication series:	None
Publication language:	English
Institution:	Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject:	330 Economics
Classification:	JEL: O31 O32 ,
Subject headings (SWD):	Deutschland , Forschung , Investition , Marktzugang , Wettbewerb
Keywords (English):	R&D , Entry , Endogenous market structures, Leadership
Abstract:	We develop a simple model of competition for the market that shows that, contrary to the Arrow view, endogenous entry threat in a market induces the average firm to invest less in R&D and the incumbent leader to invest more. We test these predictions with a Tobit model based on a unique dataset and survey for the German manufacturing sector (the Mannheim Innovation Panel). We confirm the empirical validity of our predictions and perform a number of robustness test with instrumental variables.
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BASE: Czarnitzki, Dirk ; Etro, Federico ; Kraft, Kornelius

Google Scholar: Czarnitzki, Dirk ; Etro, Federico ; Kraft, Kornelius

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