Competition and Innovation: An Inverted-U Relationship

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Competition and Innovation: An Inverted-U Relationship

Show simple item record Aghion, Philippe Howitt, Peter Griffith, Rachel Blundell, Richard Bloom, Nick 2010-10-14T15:27:33Z 2005
dc.identifier.citation Aghion, Philippe, Nick Bloom, Richard Blundell, Rachel Griffith, and Peter Howitt. 2005. Competition and innovation: An inverted-U relationship. Quarterly Journal of Economics 120, no. 2: 701-728. en_US
dc.identifier.issn 1531-4650 en_US
dc.identifier.issn 0033-5533 en_US
dc.description.abstract This paper investigates the relationship between product market competition and innovation. We find strong evidence of an inverted-U relationship using panel data. We develop a model where competition discourages laggard firms from innovating but encourages neck-and-neck firms to innovate. Together with the effect of competition on the equilibrium industry structure, these generate an inverted-U. Two additional predictions of the model—that the average technological distance between leaders and followers increases with competition, and that the inverted-U is steeper when industries are more neck-and-neck—are both supported by the data. en_US
dc.description.sponsorship Economics en_US
dc.language.iso en_US en_US
dc.publisher MIT Press en_US
dc.relation.isversionof en_US
dc.relation.hasversion en_US
dash.license LAA
dc.title Competition and Innovation: An Inverted-U Relationship en_US
dc.type Journal Article en_US
dc.description.version Version of Record en_US
dc.relation.journal Quarterly Journal of Economics en_US Aghion, Philippe 2010-10-14T15:27:33Z

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