Process versus Product Innovation in Multiproduct Firms

Iordanis Petsas () and Christos Giannikos

International Journal of Business and Economics, 2005, vol. 4, issue 3, 231-248

Abstract: This paper develops a differentiated-goods duopoly model in which firms engage in Cournot-Nash quantity competition. The effects of firm size on the choice of R&D effort between process and product innovation are examined. We find that (a) as firms devote more effort to product innovation, given that they are in the product R&D regime, their incentives to switch from product to process innovation increase, and (b) once the firm is in the process R&D regime, it will perform process R&D indefinitely.

Keywords: multiproduct firms; differentiated goods; product innovation; process innovation (search for similar items in EconPapers)
JEL-codes: L10 L25 O31 (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ijb:journl:v:4:y:2005:i:3:p:231-248

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