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


Czarnitzki, Dirk ; Etro, Federico ; Kraft, Kornelius


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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
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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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Czarnitzki, Dirk ; Etro, Federico ; Kraft, Kornelius (2008) The Effect of Entry on R&D Investment of Leaders : Theory and Empirical Evidence. Open Access [Working paper]
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