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Competition, innovation and distance to frontier

Bruno Amable, Lilas Demmou and Ivan Ledezma

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: According to a recent literature, the positive effect of competition is supposed to be growing with the proximity to the technological frontier. Using a variety of indicators, the paper tests the effect of competition and regulation on innovative activity measured by patenting. The sample consists of a panel of 15 industries for 17 OECD countries over the period 1979-2003. Results show no evidence of a positive effect of competition growing with the proximity to the frontier. Two main configurations emerge. First, regulation has a positive effect whatever the distance to the frontier and the magnitude of its impact is higher the closer the industry is to the frontier. Second, the effect of regulation is negative far from the frontier and becomes positive (or non significant) when the technology gap decreases. These results contradict the belief in the innovation-boosting effect of product market deregulation such as taken into account in the Lisbon Strategy

Keywords: Innovation; competition; distance to frontier (search for similar items in EconPapers)
JEL-codes: L16 O30 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2008-07
New Economics Papers: this item is included in nep-com, nep-cse, nep-eff, nep-ino, nep-mic and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (6)

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ftp://mse.univ-paris1.fr/pub/mse/CES2008/R08064.pdf (application/pdf)

Related works:
Working Paper: Competition, Innovation and Distance to Frontier (2008) Downloads
Working Paper: Competition, Innovation and Distance to Frontier (2008) Downloads
Working Paper: Competition, Innovation and Distance to Frontier (2007) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:r08064

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