Laggards imitate, leaders innovate: the heterogeneous productivity effect of imitation versus innovation

Ching T Liao

Industrial and Corporate Change, 2020, vol. 29, issue 2, 375-394

Abstract: This study finds that imitation increases the productivity of laggards more than that of leaders, while innovation has the opposite effect. As firms approach the productivity frontier, the effect of imitation on productivity decreases, while that of innovation increases. The empirical evidence suggests that search costs are the mechanism underlying this effect. Firms increase their productivity by imitating productive firms. When they become more productive, search costs increase, because they have fewer opportunities to imitate.

JEL-codes: L29 O39 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (8)

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