On the Number of Firms and the Quantity of Innovation

Robin Cowan

Economics Bulletin, 2002, vol. 12, issue 6, 1-9

Abstract: This paper models a dynamic innovation process to examine the relationship between levels of R and D and market structure. In contrast to most of the literature, here R and D increases firms' knowledge stocks, making future R and D less costly. This s a feedback by which market structures can affect levels of R and D. In general while an increase in the number of firms reduces R and D per firm, industry R and D increases. The model also endogenizes the number of firms using a zero profit condition.

JEL-codes: L1 L2 (search for similar items in EconPapers)
Date: 2002-04-19
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