Strategic R&D investment, competitive toughness and growth
(2010) International Journal of Economic Theory — Vol. 6, n° 3, p. 273-295 (2010)
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- Authors
- Abstract
- We show, within a single industry, the possibility that R&D-investment is non-monotonically related to competitive toughness: increasing when competition is soft and decreasing when competition is tough. This possibility results from the combination of a Schumpeterian markup squeezing effect discouraging innovation, and a concentration effect spurring innovators. It is obtained in a sectoral model where the number of innovators is random and where non-successful investors may remain productive. The result is extended to a multisectoral stochastic endogenous growth model with overlapping generations of consumers and firms, the number of which is endogenously determined in the capital market.
- Affiliations
Université Louis Pasteur, Strasbourg Bureau of Theoretical and Applied Econometrics Ecole des Hautes Etudes en Sciences Sociales GREQAM
Citations
d’Aspremont-Lynden, C., Dos Santos Ferreira, R., & Gérard-Varet, L.-A. (2010). Strategic R&D investment, competitive toughness and growth. International Journal of Economic Theory, 6(3), 273-295. https://doi.org/10.1111/j.1742-7363.2010.00135.x (Original work published 2010)