Peroni, Chiara and Gomes Ferreira, Ivete (2010): Market competition and innovation in Luxembourg.
Download (399kB) | Preview
This paper studies the empirical relation between market competition and innovation using Luxembourg's Structural Business Statistics. The competitive pressure in Luxembourg's markets is assessed by computing a prot elasticity measure, based on the idea of cost-efficiency. From this, the paper analyses the relation between competition and innovation performance by estimating an equation for the determinants of R&D expenditure. The results show that Luxembourg's industries are characterised by low levels of competition intensity, especially in markets relevant to competition policy and regulation. The relation between competition and innovation is non-linear and depends crucially on the efficient use of inputs to production. The impact of the distribution of technological efficiency on innovation is assessed by measuring both average technology gap and technology spread. The innovation effort is increasing as industries are closer to the frontier, and decreasing in the technology spread.
|Item Type:||MPRA Paper|
|Original Title:||Market competition and innovation in Luxembourg|
|Keywords:||competition; innovation; pro t elasticity; R&D|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives
|Depositing User:||chiara peroni|
|Date Deposited:||10. May 2012 01:53|
|Last Modified:||26. Feb 2013 19:18|
Aghion, P., Bloom, N., Blundell, R., Grith, R., and Howitt, P. (2005). Competition and innovation: An inverted U relationship. Quarterly Journal of Economics, CXX:701-28.
Archibugi, D. (2000). Pavitt's taxonomy sixteen years on: a review article. Econ. Innov. New Techn., 10:415-25.
Asikainen, A. (2008). Innovation and productivity in luxembourg. STATEC Working Papers No 23.
Boone, J. (2000). Competitive pressure: the eects on investments in product and process innovation. The RAND Journal, 31:549-69.
Boone, J. (2008a). Competition: theoretical parameterizations and empirical measures. Journal of Institutional and Theoretical Economics, 164:587-611.
Boone, J. (2008b). A new way of measuring competition. The Economic Journal, 118:1245-61.
Boone, J., van Ours, J., and van de Wiel, H. (2007). How (not) to measure competition. CEPR discussion paper no. 6275.
Braila, C., Rayp, G., and Sanyal, S. (2010). Competition and regulation: Belgium, 1997-2004. Federal Planning Bureau, Working Paper 3-10.
Czarnitzki, D. and Bento, C. L. (2010). Evaluation of public r&d policies: a cross-country comparison. CEPS-Instead Working Papers No 2010-31.
DiMaria, C. (2008). Taux de marge et concurrence pure et parfaite au luxembourg.
Duhamel, M. and Kelly, R. (2009). Are changes in the boone and lerner indices of competition correlated? evidence from oecd countries. mimeo.
Grith, R., Boone, J., and Harrison, R. (2005). Measuring competition. AIM Research Working Paper Series.
Grith, R., Harrison, R., and Simpson, H. (2006). Product market reform and innovation in the eu. IFS, WP06/17.
Hagen, H.-O. (2009). Yearbook on Productivity 2009, chapter An alternative way to measure competition and the relationship between competition and innovation. Statistics Sweden.
Hall, R. (1988). The relation between price and marginal cost in us industry. Journal of Political Economy, 96:921-47.
Hatzychronoglou, T. (1997). Revision of high-technology sector and product classication. 1997/2 OECD, Paris.
Mairesse, J. and Mohnen, P. (2002). Accounting for innovation and measuring innovativeness: an illustrative framework and an application. American Economic Review, 92:226-230.
Nickell, S. (1994). Competition and corporate performance. Journal of Political Economy, 104:724.
OECD (2010). Luxembourg economic survey. OECD Economic Surveys.
Pavitt, K. (1984). Sectoral patterns of technical change: towards a taxonomy and a theory. Research Policy, 13:343-73.
Polder, M. and Veldhuizen, E. (2010). Innovation and competition in the netherlands: testing the inverted u for industries and firms. Statistics Netherlands, Discussion Paper (201021).
Romer, P. (1990). Endogenous technological change. Journal of Political Economy, 98:71-102.