How does firms' perceived competition affect technological innovation in Luxembourg?

Wladimir Raymond () and Tatiana Plotnikova

No 2015-001, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper revisits the competition-innovation relationship using an unbalanced panel of enterprise data stemming from four waves of the Luxembourgish innovation survey for the period 2002-2010. We estimate by full-information maximum likelihood a nonlinear dynamic simultaneous-equations model with pseudo-fixed effects using four measures of perceived competition and three indicators of innovation and find that firms whose main market is characterised by rapid obsolescence of products are more likely to spend on innovation and to introduce product or process innovations. We also find that these firms also often consider their main market to be characterised by rapidly-changing technologies where higher competition also implies higher innovation.

Keywords: Multiple or Simultaneous Equation Models, Panel Data, Longitudinal Data, Spatial Time Series, Multiple or Simultaneous Equation Models, Discrete Regression and Qualitative Choice Models, Discrete Regressors, Proportions, Innovation and Invention, Management of Technological Innovation and R&D; Technological Change, Government Policy (search for similar items in EconPapers)
JEL-codes: C33 C35 O31 O32 O38 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com, nep-cse, nep-ino and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2015001

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