Competitive Pressure and the Adoption of Complementary Innovations

Eugenio Miravete (), Tobias Kretschmer and Pernías, Jose C

No 8289, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Liberalization of the European automobile distribution system in 2002 limits the ability of manufacturers to impose vertical restraints, leading to a substantial increase in competitive pressure among dealers. We estimate an equilibrium model of profit maximization to evaluate how dealers change their innovation adoption strategies following the elimination of exclusive territories. Using French data we evaluate the existence of complementarities between the adoption of software applications and the scale of production. Firms view these innovations as substitutes and concentrate their effort in one type of software as they expand their scale of production. Results are robust to the existence of unobserved heterogeneity.

Keywords: Competitive pressure; Complementarity; Product and process innovation (search for similar items in EconPapers)
JEL-codes: C35 L86 O31 (search for similar items in EconPapers)
Date: 2011-03
New Economics Papers: this item is included in nep-com, nep-cse, nep-eur, nep-ino, nep-ipr, nep-pr~ and nep-tid
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Related works:
Journal Article: Competitive Pressure and the Adoption of Complementary Innovations (2012)
Working Paper: Competitive Pressure and the Adoption of Complementary Innovations (2009)
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