Strategic R&D investment, competitive toughness and growth

Claude d'Aspremont, Rodolphe Dos Santos Ferreira and Louis‐André Gérard‐Varet
Authors registered in the RePEc Author Service: Louis-André Gérard-Varet

International Journal of Economic Theory, 2010, vol. 6, issue 3, 273-295

Abstract: We show, within a single industry, the possibility that R&D‐investment is non‐monotonically related to competitive toughness: increasing when competition is soft and decreasing when competition is tough. This possibility results from the combination of a Schumpeterian markup squeezing effect discouraging innovation, and a concentration effect spurring innovators. It is obtained in a sectoral model where the number of innovators is random and where non‐successful investors may remain productive. The result is extended to a multisectoral stochastic endogenous growth model with overlapping generations of consumers and firms, the number of which is endogenously determined in the capital market.

Date: 2010
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Citations: View citations in EconPapers (8)

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https://doi.org/10.1111/j.1742-7363.2010.00135.x

Related works:
Working Paper: Strategic R&D investment, competitive toughness and growth (2010)
Working Paper: Strategic R&D investment, competitive toughness and growth (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:ijethy:v:6:y:2010:i:3:p:273-295

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