Product life cycles, product innovation and firm growth

Hiroki Murakami ()
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Hiroki Murakami: Chuo University

Annals of Operations Research, 2024, vol. 337, issue 3, No 6, 873-890

Abstract: Abstract This paper studies research and development (R &D) for product innovation of firms faced with “product life cycles.” We represent the concept of product life cycles with bounded revenue and profit functions and describe R &D for product innovation as an activity to control the “birth rate of a new product” (i.e., the probability of product innovation). We then derive the optimal level of R &D, corresponding to the optimal birth rate of a new product, and show that the growth rate of the firm’s expected total revenue converges to the optimal birth rate of a new product in the long run.

Keywords: Firm growth; Birth rate of products; Product innovation; Product life cycles; O31; O32; O41 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10479-023-05605-x

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