| Abstract: |
This article analyzes how the perceived effectiveness of intellectual property
protection and competitive pressure affect firms' innovation strategy choices,
concretely, whether to abstain from innovation, to introduce products that are
known in the market but new to the firm (imitation) or to introduce market
novelties (innovation). Using a sample of 1253 German firms from manufacturing
and services sectors I show that the perceived effectiveness of patent
protection positively affects firms' propensity to imitate and to innovate.
Having a small or a medium number of competitors positively affects firms'
propensity to imitate and to innovate as compared to being a monopolist or
having a large number of competitors. However, this effect varies with the
perceived patent protection effectiveness. If the perceived patent protection
effectiveness is low or medium, both innovation and imitation are enhanced,
whereas if it is high, only innovation is enhanced. -- |