Endogenous Market Structures and Innovation by Leaders

Models of competition for the market with endogenous market structures show that, contrary to the Arrow view, an endogenous entry threat induces the average firm to invest less in R&D and the incumbent leader to invest more. We test these predictions using a unique dataset for the German manufacturing sector (the Mannheim Innovation Panel). In line with our predictions, endogenous entry threats as perceived by the firms (in survey data) reduce R&D intensity for an average firm, but they increase it for an incumbent leader. These results hold after a number of robustness tests with instrumental variable regressions

Arrow · Competition (biology) · Econometrics · Economics · Endogeneity · Endogeny · German · Industrial organization · Instrumental variable · Market structure · Microeconomics · Panel data · Robustness (evolution) · Survey data collection · Economic Growth and Productivity · Firm Innovation and Growth · Global trade and economics

• The role of government-industry-academia partnership in business incubation

  Open Access•Junbi Zhou, Mingyue Wang•Technology in Society•2023

  Incluir item

• Efficient estimation of limited dependent variable models with endogenous explanatory variables

  Open Access•Whitney K Newey•Journal of Econometrics•1987

  Incluir item

• What do we know about entry?

  Open Access•Paul A Geroski•International Journal of…•1995

  Incluir item

• Relaxing Price Competition Through Product Differentiation

  Avner Shaked, Jeanna Sutton et al.•The Review of Economic Studies•1982

  Incluir item

• Economic Welfare and the Allocation of Resources for Invention

  Kenneth J Arrow•Rate and Direction of Inventive…•1962

  Incluir item

• Market Size in Innovation

  Daron Acemoglu, Joshua Linn•The Quarterly Journal of Economics•2004

  Incluir item

• Generalized reduced rank tests using the singular value decomposition

  Open Access•Frank Kleibergen, Richard Paap•Journal of Econometrics•2006

  Incluir item

• The Estimation of a Simultaneous Equation Generalized Probit Model

  Takeshi Amemiya•Econometrica•1978

  Incluir item

• Specification Tests in Econometrics

  Jerry A Hausman•Econometrica•1978

  Incluir item

• Instrumental Variables Regression with Weak Instruments

  Douglas O Staiger, Douglas Staiger et al.•Econometrica•1997

  Incluir item

• An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply

  Richard J Smith, Richard Blundell et al.•Econometrica•1986

  Incluir item

• The Effects of Entry on Incumbent Innovation and Productivity

  Philippe Aghion, Richard Blundell et al.•The Review of Economics and…•2009

  Incluir item

• Sunk Costs, Depreciation, and Industry Dynamics

  Adelina Gschwandtner, Val E Lambson•The Review of Economics and…•2012

  Incluir item

• A Model of Growth Through Creative Destruction

  Philippe Aghion, Peter Howitt•Econometrica•1992

  Incluir item

• Industrial Concentration and Market Integration in the European Union

  Open Access•Bruce Lyons, Catherine Matraves et al.•Economica•2001

  Incluir item

• Identifying Welfare Effects from Subjective Questions

  Open Access•Martin Ravallion, Michael Lokshin•Economica•2001

  Incluir item

• Stackelberg Competition with Endogenous Entry

  Open Access•Federico Etro•The Economic Journal•2008

  Incluir item

• Feature

  Open Access•Mary Gregory, Sara Connolly•The Economic Journal•2008

  Incluir item

• Innovation by Leaders

  Open Access•Federico Etro•The Economic Journal•2004

  Incluir item