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Firm Level Behavior in Repeated R&D Races

Author

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  • James M. Zolnierek

    (Federal Communications Commission)

Abstract

This paper contains an analysis of a quality ladders growth model with firm-level decreasing returns R&D technology. This analysis explains the relationship between competition in R&D races and firm R&D efforts. While competition proves to have a positive effect on industry growth rates, the relationship between competition and individual firm R&D effort is negative and dominated by intertemporal effects. The analysis also demonstrates that differences between the socially optimal and free market growth rates increase as the economy's resource endowment increases.

Suggested Citation

  • James M. Zolnierek, 1998. "Firm Level Behavior in Repeated R&D Races," Eastern Economic Journal, Eastern Economic Association, vol. 24(3), pages 293-308, Summer.
    • Handle: RePEc:eej:eeconj:v:24:y:1998:i:3:p:293-308
    as

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    File URL: http://web.holycross.edu/RePEc/eej/Archive/eeconj/Volume24/V24N3P293_308.pdf
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    References listed on IDEAS

    as
    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Hall, Bronwyn H & Griliches, Zvi & Hausman, Jerry A, 1986. "Patents and R and D: Is There a Lag?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 265-283, June.
    3. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
    4. Thompson, Peter, 1996. "Technological Opportunity and the Growth of Knowledge: A Schumpeterian Approach to Measurement," Journal of Evolutionary Economics, Springer, vol. 6(1), pages 77-97, February.
    5. Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 429-436.
    6. Thompson, Peter & Waldo, Doug, 1994. "Growth and trustified capitalism," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 445-462, December.
    7. Segerstrom, Paul S & Zolnierek, James M, 1999. "The R&D Incentives of Industry Leaders," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 745-766, August.
    8. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 395-410.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Firm Level; Firm; Firms; Quality; R&D; Technology;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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