The effect of market entry on innovation: evidence from UK university incubators

Christian Helmers

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper investigates the effect of market entry of new firms on incumbent firms' innovative activity measured as patent applications. The basic assumption is that the effect of entry varies by geographical distance between entrants and incumbents due to the presence of localized unobserved spillovers. In order to avoid endogeneity problems commonly associated with the timing of entry and entrants' location choice, I analyze entry induced by the establishment of university business incubators, which are usefully exogenous in time and space. The results show that entry has a statistically and economically significantly positive strategic effect on incumbent patenting which is attenuated by the geographical distance between entrant and incumbent.

Keywords: patents; market entry; incubators; spillover (search for similar items in EconPapers)
JEL-codes: L20 L22 O34 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2010-09-01
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:121925

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