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on Technology and Industrial Dynamics |
| By: | Aghion, P.; Blundell, R.; Griffith, R.; Howitt, P.; Prantl, S. |
| Abstract: | How does firm entry affect innovation incentives in incumbent firms? Microdata suggest that there is heterogeneity across industries. Specifically, incumbent productivity growth and patenting is positively correlated with lagged greenfield foreign firm entry in technologically advanced industries, but not in laggard industries. In this paper we provide evidence that these correlations arise from a causal effect predicted by Schumpeterian growth theory—the threat of technologically advanced entry spurs innovation incentives in sectors close to the technology frontier, where successful innovation allows incumbents to survive the threat, but discourages innovation in laggard sectors, where the threat reduces incumbents' expected rents from innovating. We find that the empirical patterns hold using rich micro panel data for the United Kingdom. We control for the endogeneity of entry by exploiting major European and U.K. policy reforms, and allow for endogeneity of additional factors. We complement the analysis for foreign entry with evidence for domestic entry and entry through imports. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:ner:ucllon:http://eprints.ucl.ac.uk/15901/&r=tid |
| By: | Macartney, G.J. |
| Abstract: | This thesis investigates the effect that market institutions have on economic outcomes such as employment and innovation. The market institutions under study are those that determine the conditions in product, labour and capital markets. Of particular interest is how the effect of institutional changes in one market depends on the conditions in another, or depends on the nature of innovation by the firm. The first chapter describes the matching of patents at the European Patent Office to firm accounts data for all registered firms across fifteen European countries. This constitutes a valuable new dataset for research in innovation that is used for much of the empirical work in this thesis. The second chapter investigates the impact of product market competition on unemployment, and how this depends on labour market institutions. It uses differential changes in regulations across OECD countries to find that increased competition reduces unemployment, more so in countries with strong unions. The third chapter investigates how the effect of product market competition on innovation depends on financial institutions. Using exogenous variation in competition in manufacturing industries this chapter finds that the positive effect of competition on innovation is larger in countries with good financial institutions. The fourth chapter investigates the effect of employment protection legislation on innovation. The theoretical effect of employment protection legislation on innovation is ambiguous, and empirical evidence is thus far inconclusive. This chapter finds that within multinational enterprises overall innovation occurs more in subsidiaries located in countries with high employment protection, however radical innovation occurs more in subsidiaries located in countries with low employment protection. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:ner:ucllon:http://eprints.ucl.ac.uk/18564/&r=tid |
| By: | Ottoz, Elisabetta; Cugno, Franco |
| Abstract: | We present a model where an incumbent firm has a proprietary product whose technology consists of at least two components, one of which is patented while the other is kept secret. At the patent expiration date, an entrant firm will enter the market on the same technological footing as the incumbent if it is successful in duplicating, at certain costs, the secret component of the incumbent’s technology. Otherwise, it will enter the market with a production cost disadvantage. We show that under some conditions a broad scope of trade secret law is socially beneficial despite the innovator is over-rewarded. |
| Keywords: | knowledge spillovers; duplication costs; covenants not to compete; inevitable disclosure |
| JEL: | O34 O31 |
| Date: | 2010–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20672&r=tid |