Competition and Innovation: An Inverted-U Relationship
Peter Howitt (),
Rachel Griffith (),
Richard Blundell () and
Nicholas Bloom ()
Scholarly Articles from Harvard University Department of Economics
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 modelâ€”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-neckâ€”are both supported by the data.
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (831) Track citations by RSS feed
Published in Quarterly Journal of Economics
Downloads: (external link)
Journal Article: 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:hrv:faseco:4481507
Access Statistics for this paper
More papers in Scholarly Articles from Harvard University Department of Economics Contact information at EDIRC.
Series data maintained by Office for Scholarly Communication ().