Competition and Innovation: an Inverted-U Relationship
Nicholas Bloom (),
Richard Blundell (),
Rachel Griffith () and
Peter Howitt ()
The Quarterly Journal of Economics, 2005, vol. 120, issue 2, 701-728
This paper investigates the relationship between product market competition and innovation. We find strong evidence of an inverted-U relationship using panel data. We develop a model where competition discourages laggard firms from innovating but encourages neck-and-neck firms to innovate. Together with the effect of competition on the equilibrium industry structure, these generate an inverted-U. Two additional predictions of the model—that the average technological distance between leaders and followers increases with competition, and that the inverted-U is steeper when industries are more neck-and-neck—are both supported by the data.
References: Add references at CitEc
Citations View citations in EconPapers (941) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: Competition and Innovation: An Inverted-U Relationship (2005)
Working Paper: Competition and innovation: an inverted U relationship (2002)
Working Paper: Competition and Innovation: An Inverted U Relationship (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:qjecon:v:120:y:2005:i:2:p:701-728.
Access Statistics for this article
The Quarterly Journal of Economics is currently edited by Robert J. Barro, Elhanan Helpman, Lawrence F. Katz and Andrei Schleifer
More articles in The Quarterly Journal of Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().