Innovation, competition and incentives for R&D


Wörter, Martin ; Rammer, Christian ; Arvanitis, Spyridon


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URL: http://ub-madoc.bib.uni-mannheim.de/2963
URN: urn:nbn:de:bsz:180-madoc-29637
Document Type: Working paper
Year of publication: 2010
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: O3 ,
Subject headings (SWD): Schweiz , Deutschland , Innovationswettbewerb , Faktorsubstitution , Forschung und Entwicklung , Wettbewerb , Industrieforschung
Keywords (English): Innovation , R&D , Competition
Abstract: This paper analyses the relationship between past innovation output, competition, and future innovation input in a dynamic econometric setting. We distinguish two dimensions of competition that correspond to the concepts of product substitutability and entry barriers due to fixed costs. Based on firm-level panel data for Germany and Switzerland we obtain consistent results for both countries. Innovation output in t-1 as measured by the sales share of innovative products is positively related to the degree of product obsolescence in t, and negatively to the degree of substitutability in t in both countries. Further, we find that rapid product obsolescence provides positive incentives for higher – primarily product-oriented – R&D investments in t+1, while high substitutability exerts negative incentives for future R&D investment.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Wörter, Martin ; Rammer, Christian ; Arvanitis, Spyridon (2010) Innovation, competition and incentives for R&D. Open Access [Working paper]
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