Innovation and firm-level persistent profitability: a Schumpeterian framework

Peter W Roberts
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Peter W Roberts: Columbia Business School, Columbia University, New York, NY, USA, Postal: Columbia Business School, Columbia University, New York, NY, USA

Managerial and Decision Economics, 2001, vol. 22, issue 4-5, 239-250

Abstract: Studies of firm-level profit dynamics tend to attribute the variance in profit persistence to variability in the extent to which imitative pressures are resisted. This monopoly-based explanation of persistent profitability implicitly assumes a one-to-one correspondence between firm-level and product-level profit dynamics. Following Schumpeter, this paper begins to develop a framework for firm-level profit persistence that embraces product innovation, competitor imitation, and, more importantly, the prospect that several product innovations may be embodied within a single firm. Such an approach opens the door for an innovation-based explanation of profit persistence to accompany the monopoly-based arguments that are typically offered. Copyright © 2001 John Wiley & Sons, Ltd.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:22:y:2001:i:4-5:p:239-250

DOI: 10.1002/mde.1018

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