Is There Really an Inverted U-shaped Relation Between Competition and R&D?

Patrik Tingvall and Andreas Poldahl ()
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Andreas Poldahl: Örebro Universitet, Postal: Örebro Universitet, Fakultetsgatan 1, 701 82 Örebro, http://www.oru.se

No 207, EIJS Working Paper Series from Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: We test whether predictions of the Aghion and Howitt (2004) model are supported by firm level data. In particular, we analyze if there is an inverted U-shaped relation between competition and R&D. Results show that the inverted U-shaped relation is supported by the Herfindahl index but not by the price cost margin. Using the Herfindahl index results suggest that breaking up monopolies increases R&D while further increases in competition most likely leads to reduced R&D. Comparing different estimators, we find that time-series based estimators typically result in less clear-cut results, probably driven by a lack of time series variation in measures of competition.

Keywords: R&D; competition; firm size; spillovers (search for similar items in EconPapers)
JEL-codes: D40 L10 L60 O30 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2005-02-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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http://swopec.hhs.se/eijswp/papers/eijswp0207.pdf (application/pdf)

Related works:
Journal Article: Is there really an inverted U-shaped relation between competition and R&D? (2006)
Journal Article: Is there really an inverted U-shaped relation between competition and R&D? (2006)
Working Paper: Is There Really an Inverted U-shaped Relation Between Competition and R&D? (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:eijswp:0207

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