What Drives Market Structure? On the Relation Between Firm Demographic Processes, Firms' Innovative Behaviour and Market Structure

Fauchart, Emmanuelle ; Keilbach, Max

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URL: http://ub-madoc.bib.uni-mannheim.de/369
URN: urn:nbn:de:bsz:180-madoc-3691
Document Type: Working paper
Year of publication: 2002
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: G30 O30 L60 ,
Subject headings (SWD): Innovation , Arbeitsmarktforschung , Forschung und Entwicklung , Simulation
Abstract: In this paper we suggest an structural model that specifies firm growth as a function of firm specific parameters and of competition for purchase power with other firms on a given market. Moreover, we explicitely model firms' innovative behaviour and distinguish between different innovation regimes. On the basis of a set of simulations of this model we derive a number of empirically testable hypotheses. A subset of these have already found support in the empirical literature. We take these as evidence in favour of the explanatory power of the model. In addition, we are able to derive further testable propositions on the interaction of firm-demographic processes, innovative behaviour and market structure that go beyond the existing literature and that we suggest for further research. We conclude that the approach chosen here provides a fruitful pathway for further research.
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