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on Technology and Industrial Dynamics |
| By: | Brouwer, E.; Wiel, H.P. van der (Tilburg University, Center for Economic Research) |
| Abstract: | This paper examines the relationship between competition, innovation and productivity for the Netherlands. We use industry level data aggregated from micro data as well as moments from firm level data for the period 1996-2006. We match innovation data from Community Innovation Survey with accounting data to link innovative activities with performance at the industry level. We find strong evidence for a positive impact of competition on Total Factor Productivity (TFP) at the industry level. Competition directly increases TFP by reducing X-ineficiencies and removing inefficient forms from markets, but also through more innovation. Nonetheless, there exists an inverted U- curve between competition and innovation for the Netherlands, at least for manufacturing industries. Yet, our results indicate that a negative effect of competition on productivity through lower innovation expenditures arises only at very high levels of competition. |
| Keywords: | competition;innovation;profit elasticity;productivity |
| JEL: | D40 L16 O31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201052&r=tid |
| By: | Bruno Merlevede; Koen Schoors; Mariana Spatareanu |
| Abstract: | This study analyzes the dynamic effect of FDI on local firms’ productivity by relaxing the standard implicit assumption that technological spillovers are immediate and permanent. We find that the entry of majority foreign owned firms has a short run negative effect on the productivity of local competitors, which is more than offset by a longer run positive effect. The entry of minority foreign owned firms has an immediate, though short-lived, positive effect on local suppliers through backward linkages. The entry of majority foreign owned firms also improves the productivity of local suppliers, but the effect materializes later and lasts longer. |
| Keywords: | FDI, spillovers, dynamics, timing |
| JEL: | F2 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:26710&r=tid |
| By: | Askenazy, P.; Breda, T.; Irac, D. |
| Abstract: | Advertising and innovation are two engines for firms to escape competition through a better attraction power toward consumers or quality advantage. We propose a model that encompasses both the static and dynamic interactions between R&D, advertising and competitive environment. This model provides two main predictions. First, for a given competitive environment, quality leaders spend more in advertising in order to extract maximal rents; thus, lower costs of ads may favor R&D. Second, more competition pushes Neck and Neck firms to advertise more to attract a larger share of consumers on their products or services. Empirical evidence from a large panel of 59,000 French firms over 1990-2004 supports these two properties. |
| Keywords: | Advertising, Innovation, Competition, Lerner. |
| JEL: | D4 O31 D12 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:284&r=tid |