Does competition spur innovation? The case of yardstick competition

Yassine Lefouili

Economics Letters, 2015, vol. 137, issue C, 135-139

Abstract: This paper investigates the effect of yardstick competition on firms’ incentives to invest in cost-reducing innovations. We show that an increase in the intensity of yardstick competition, for which we provide a natural measure, increases the incentives to innovate.

Keywords: Competition and innovation; Yardstick competition; Cost reduction (search for similar items in EconPapers)
JEL-codes: D4 L1 L5 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:137:y:2015:i:c:p:135-139

DOI: 10.1016/j.econlet.2015.10.033

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