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Advantage in the Management of Research: Firms Technological Races on Innovation

Negassi Syoum () and Tsu-Yi Hung ()
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Negassi Syoum: Business School of University of Sorbonne, Paris 1, FRANCE

Advances In Management, 2011, vol. 4, issue 3

Abstract: This paper explores the advantage of utilising technological race model as compared with an auction game model in order to analyse firm competition. Compared to the previous theoretical and empirical works, our research proposes to extend the technological race theory to the organisational and technological spillovers approaches. Our econometric estimation is based on an original pooling method. By considering the major changes experienced by patent regimes in Europe, it estimates a structural model. Our results are robust, since they are identical in the two methods (Random coefficients and Tobit methods). The results reveal first that the R&D dynamics by internal and external constraints oblige firms to stay in the race and not to be overtaken by their primary competitors. Second, patents maintain a competitive asymmetry and especially dissuade the rival firms to perform their research. Third, there is a strong persistence in the decisions related to the implementation of innovation. Robust results verify the hypotheses from Cockburn and Henderson11 and the theory of the persistence which is an indicator of the dynamic behaviour of the French enterprises. The approach of the technological race applies to the process of research in the French manufacturing industry.

Date: 2011
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