Competition and Persistence of R&D

Martin Woerter

No 11-290, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: This paper investigates the R&D persistence of R&D active firms in different markets with different intensities of competition, based on firm-level panel data for the period 1996-2008. In a dynamic setting of the empirical model it turns out that persistence is strongly related to market competition (measured by the number of principal competitors). Persistence of R&D expenditures is more likely to be observed in markets with few principal competitors (between 6 and 10) and is very unlikely to be observed in polypolistic type of markets (more than 50 competitors). These results call for a stronger coordination between competition policy and innovation promotion policy, since the former basically aims at larger markets with many competitors, while the latter aims at persistence of R&D efforts and thus markets with fewer competitors.

Keywords: R&D expenditures; Persistence; Innovation; Competition; Panel data; Empirical investigation (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011-11
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Citations: View citations in EconPapers (2)

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http://dx.doi.org/10.3929/ethz-a-006698629 (application/pdf)

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Journal Article: Competition and Persistence of R&D (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:11-290

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