Competition and Innovation

By Richard J. Gilbert. 2006

311 citations recorded by the source corpus.

The Department of Justice and the Federal Trade Commission have frequently raised innovation concerns as reasons to challenge mergers. This chapter surveys the economic theories of innovation incentives and considers how the theory may inform antitrust analysis for merger investigations and other conduct that involve innovation. Competition can promote innovation by reducing the value of failing to invest in research and development. However, with non-exclusive intellectual property rights, competition can reduce innovation incentives by lowering post-innovation profits. There is some empirical support for these economic theories. The chapter concludes that economics can inform antitrust analysis for mergers and other conduct that could affect innovation, although it is important that antitrust analysis carefully consider the key factors that drive innovation incentives.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/466b7dffe768305a0bf5247543ef7ea26a6a1acd

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Citations in the corpus

ARE FAMILY FRIENDLY WORKPLACE PRACTICES A VALUABLE FIRM RESOURCE (2011, methodology): “To measure competition, we follow Nickell (1996) and Aghion et al. (2005) in using two broad measures.”
Is there a U-shaped relation between competition and investment? (2011, unknown): “This relation is generally regarded as ambiguous; depending on the precise definition of competitive intensity and the particular oligopolistic environment, competition may have positive or negative effects on investment (Gilbert 2006; Schmutzler 2007; Vives 2008).”
Corporate Governance and Innovation: A Survey (2012, unknown): “As Aghion et al. (2005) pointed out, predominantly based on cross-section industry data, empirical research on the Schumpeterian hypotheses foundered because it overlooked the fact that the degree of competition changes as a result of successful innovation, which changes the competitive pressure to ”
Transition to Clean Technology (2016, methodology): “In estimating a general equilibrium model of firm-level innovation and employment dynamics, we follow Lentz and Mortensen ð2008Þ, Akcigit and Kerr ð2010Þ, and Acemoglu et al. ð2013Þ.”
Do Product Market Regulations in Upstream Sectors Curb Productivity Growth? Panel Data Evidence For OECD Countries (2013, methodology): “, 2004), especially for incumbent firms that are close to the technological frontier (Aghion et al., 2005; Aghion et al., 2006a).”
Individual and time effects in nonlinear panel models with large N , T (2013, methodology): “In the online supplement (see Appendix E), we illustrate the corrections with an empirical application on the relationship between competition and innovation using a panel of U.K. industries, following Aghion et al. (2005).”
A New Way to Measure Competition (2004, methodology): “In economic research, there are empirical papers trying to identify the effect of competition on firms efficiency (Nickell, 1996), on firms innovative activity (Aghion et al., 2005 and references therein) and the effects of competition on wage levels (Nickell, 1999 for an overview) and wage inequali”
How (Not) to Measure Competition (2007, unknown): “(5)This effect can be partly eliminated by using the unweighted PCM as measure of competition (as in Aghion et al. (2005)).”
R&D Networks: Theory, Empirics, and Policy Implications (2019, unknown): “Aghion et al. [2014]), this may not necessarily hold for welfare.”
Let a Thousand Flowers Bloom? An Early Look at Large Numbers of Software App Developers and Patterns of Innovation (2012, background): “This overall “crowding-out” of incentives with intensive competition is consistent with what we might expect in more typical contexts of industrial competition and innovation ( cf. Aghion et al. 2005, Aghion and Griffith 2008) .”
Internal and external factors in innovation persistence (2013, background): “that the higher the efficiency of the rivals within the same industry, the higher the likelihood that each firm relies on the introduction of innovation as a competitive tool and the stronger the persistence of innovation will be (Aghion et al. 2005).”
Innovation and productivity in formal and informal firms in Ghana (2017, unknown): “Some competition in the market provides a conducive environment to innovate in order for firms to survive and succeed (Aghion et al., 2005).”
Accounting for Trends in Productivity and R&D: A Schumpeterian Critique of Semi‐Endogenous Growth Theory (2007, background): “See Pack (1994), Coe and Helpman (1995), Jones (1995a, 1995b), Aghion and Howitt (1998b), Parente and Prescott (1999), Howitt (2000), Arora (2001), Zachariadis (2003), Aghion et al. (2005), Aghion, Howitt and Mayer-Foulkes (2005) and Howitt and Mayer-Foulkes (2005).”
What Happened to US Business Dynamism? (2019, methodology): “On the firm side, we set the curvature parameter of the R&Dproduction function for incumbents to g 5 1=0:35, in line with previous work in the literature (Kortum 1993; Acemoglu and Akcigit 2012; Acemoglu et al. 2016). We also assume that the entrants’ R&D production function has the same curvature v”