Is there really an inverted U-shaped relation between competition and R&amp;D?

Tingvall, Patrik Gustavsson; Poldahl, Andreas

doi:10.1080/10438590500129755

Cited by 104 publications

(47 citation statements)

References 39 publications

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“…The probability of innovation tends to increase over time and that more competition increases initially and then reduces the probability of innovation. This is consistent with evidence from other economies (Aghion et al 2005;Tingvall and Poldahl 2006). Firms that are less likely to invest in research and development are often burdened with heavy debt or owned by offshore investors-in particular, investors from Hong Kong, Macau and Taiwan.…”

supporting

confidence: 76%

“…Since the average age of the firms in the sample is 17, most Chinese enterprises are still on the upward (left) side of the inverted-U shape. As for the relationship between competition and research and development intensity, there is no evidence of an inverted U-shaped relation, as argued by Aghion et al (2005) and Tingvall and Poldahl (2006). Instead it is shown in Table 16.2 that research and development intensity and competition are negatively related.…”

mentioning

confidence: 62%

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China: The Next Twenty Years of Reform and Development

Garnaut¹,

Golley²,

Song³

2010

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supporting

confidence: 76%

mentioning

confidence: 62%

China: The Next Twenty Years of Reform and Development

Garnaut¹,

Golley²,

Song³

2010

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“…Some authors also find a relationship between the degree of competition and the level of innovation, with contradictory empirical evidence (Tingvall and Poldahl, 2006). This is in line with the work of Aghion et al (2005), who modeled an inverted-U relationship between innovation and competition.…”

Section: Theretical Frameworksupporting

confidence: 60%

Location and adoption of ICT innovations in the agri-food industry

Domènech¹,

Martínez-Gómez²,

Más‐Verdú³

2014

Applied Economics Letters

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This article identifies the web technologies adoption pattern of agri-food industries considering a set of characteristics which include location, economic performance and previous history of adopting innovations. Our main results highlight that, together with certain firm characteristics, rural locations act as an accelerator for the adoption of web technology, compared to the slower adoption rate in urban areas.

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“…Other empirical findings that support an inverted-U relationship have been reported by Levin et al (1985), , Tingvall and Poldahl (2006), Alder (2010), van der Wiel (2010), or Polder andVeldhuizen (2012).…”

Section: The Inverted-u Relationshipmentioning

confidence: 62%

Competition, R&D and Innovation: Testing the Inverted-U in a Simultaneous System

Peneder

Woerter

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractTo address the relationship between innovation and competition we jointly estimate the opportunity, production, and impact functions of innovation in a simultaneous system. Based on Swiss micro-data, we apply a 3-SLS system estimation. The findings confirm a robust inverted-U relationship, in which a rise in the number of competitors at low levels of initial competition increases the firm's research effort, but at a diminishing rate, and the research effort ultimately decreases at high levels of competition. When we split the sample by firm types, the inverted-U shape is steeper for creative firms than for adaptive ones. The numerical solution indicates three particular configurations of interest: 1. an uncontested monopoly with low innovation, 2. low competition with high innovation, and 3. a "no innovation trap" at very high levels of competition. The distinction between solution 1. and 2. corresponds to Arrow's positive effect of competition on innovation, whereas the difference between outcomes 2. and 3. captures Schumpeter's positive effect of market power on innovation. Simulating changes of the exogenous variables, technology potential, demand growth, firm size and exports have a positive impact on innovation, while foreign ownership has a negative effect, and higher appropriability has a positive impact on the number of competitors.

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Is there really an inverted U-shaped relation between competition and R&D?

Cited by 104 publications

References 39 publications

China: The Next Twenty Years of Reform and Development

China: The Next Twenty Years of Reform and Development

Location and adoption of ICT innovations in the agri-food industry

Competition, R&D and Innovation: Testing the Inverted-U in a Simultaneous System

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