Catching-up or Leapfrogging ? The Effects of Competition on Innovation and Growth

David ENCAOUA () and D. Ulph

Papiers d'Economie Mathématique et Applications from Université Panthéon-Sorbonne (Paris 1)

Abstract: The main objective of this paper is to analyze the links between product market competition, innovation and growth. We capture the idea that firms innovate in order to try to escape - albeit temporarily - from the pressure of competition exerted on them by their rivals. At each date, an industry may be either in a leveled or in an unleveled position. In an unleveled industry, we assume that if a laggard firm succeds in innovating, it will either leapfrog the leader with some probability or catch-up both its knowledge and its technology with the complementary probability.

Keywords: INNOVATIONS; GROWTH RATE; COMPETITION (search for similar items in EconPapers)
JEL-codes: O30 O31 O33 L11 L16 (search for similar items in EconPapers)
Date: 2000
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Working Paper: Catching-up or Leapfrogging: The effects of competition on innovation and growth (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:fth:pariem:2000.97

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