IDEAS home Printed from https://ideas.repec.org/a/spr/joevec/v26y2016i3d10.1007_s00191-016-0457-5.html
   My bibliography  Save this article

Intensity of R&D competition and the generation of innovations in heterogeneous setting

Author

Listed:
  • Anton Bondarev

    (University of Basel)

Abstract

This paper discusses the role of technological spillovers and technological races in dynamic strategic interactions setup. Two firms invest simultaneously into new products creation and into further development of the quality of these products. Each firm may benefit from the costless technological spillover in case of technological leadership of the other firm. At the same time they cooperate in the joint creation of new products. Three different scenarios emerge: constant technological leadership, the technological leapfrogging and symmetric outcome with or without potential spillovers. R&D is maximal for the first scenario and minimal for the symmetric play under the threat of spillover with endogenous specialization of firms’ activities in cases of constant leadership and leapfrogging. Definition of technological competition intensity as inverse to the technology gap allows to recover inverted-U relationship between those two in a multidimensional context.

Suggested Citation

  • Anton Bondarev, 2016. "Intensity of R&D competition and the generation of innovations in heterogeneous setting," Journal of Evolutionary Economics, Springer, vol. 26(3), pages 621-653, July.
    • Handle: RePEc:spr:joevec:v:26:y:2016:i:3:d:10.1007_s00191-016-0457-5
    DOI: 10.1007/s00191-016-0457-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00191-016-0457-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00191-016-0457-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bondarev, Anton, 2014. "Endogenous specialization of heterogeneous innovative activities of firms under the technological spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 38(C), pages 235-249.
    2. Kenneth L. Judd, 2003. "Closed-loop equilibrium in a multi-stage innovation race," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(2), pages 673-695, March.
    3. Rosenkranz, Stephanie, 2003. "Simultaneous choice of process and product innovation when consumers have a preference for product variety," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 183-201, February.
    4. Amable, Bruno & Demmou, Lila & Lezdema, Ivan, 2007. "Competition, Innovation and Distance to Frontier," CEPREMAP Working Papers (Docweb) 0706, CEPREMAP.
    5. Reinganum, Jennifer F, 1982. "A Dynamic Game of R and D: Patent Protection and Competitive Behavior," Econometrica, Econometric Society, vol. 50(3), pages 671-688, May.
    6. Dawid, Herbert & Greiner, Alfred & Zou, Benteng, 2010. "Optimal foreign investment dynamics in the presence of technological spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 34(3), pages 296-313, March.
    7. Nicholas Bloom & Mark Schankerman & John Van Reenen, 2013. "Identifying Technology Spillovers and Product Market Rivalry," Econometrica, Econometric Society, vol. 81(4), pages 1347-1393, July.
    8. Hartwick, John M., 1984. "Optimal R&D levels when firm j benefits from firm i's inventive activity," Economics Letters, Elsevier, vol. 16(1-2), pages 165-170.
    9. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    10. Luca Lambertini & Raimondello Orsini, 2001. "Network Externalities and the Overprovision of Quality by a Monopolist," Southern Economic Journal, John Wiley & Sons, vol. 67(4), pages 969-982, April.
    11. Chu, Angus C. & Cozzi, Guido & Galli, Silvia, 2012. "Does intellectual monopoly stimulate or stifle innovation?," European Economic Review, Elsevier, vol. 56(4), pages 727-746.
    12. Luca Lambertini, 2009. "Optimal Product Proliferation in Monopoly: A Dynamic Analysis," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 1(1), pages 80-97, September.
    13. Luca Lambertini & Andrea Mantovani, 2010. "Process and product innovation: A differential game approach to product life cycle," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(2), pages 227-252, June.
    14. Navas, Jorge & Kort, Peter M., 2007. "Time to complete and research joint ventures: A differential game approach," Journal of Economic Dynamics and Control, Elsevier, vol. 31(5), pages 1672-1696, May.
    15. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 701-728.
    16. Chu, Angus C., 2011. "The welfare cost of one-size-fits-all patent protection," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 876-890, June.
    17. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    18. Jeffrey I. Bernstein & M. Ishaq Nadiri, 1989. "Research and Development and Intra-industry Spillovers: An Empirical Application of Dynamic Duality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(2), pages 249-267.
    19. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    20. Anton Bondarev, 2012. "The long-run dynamics of product and process innovations for a multi-product monopolist," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(8), pages 775-799, November.
    21. Peretto, Pietro F, 1998. "Technological Change and Population Growth," Journal of Economic Growth, Springer, vol. 3(4), pages 283-311, December.
    22. Baveja, A. & Feichtinger, G. & Hartl, R.F. & Haunschmied, J.L. & Kort, P.M., 1999. "A Resource-Constrained Optimal Control Model for Crackdown on Illicit Drug Markets," Other publications TiSEM 8648e4a1-5cc5-4167-8aad-9, Tilburg University, School of Economics and Management.
    23. Rebecca Henderson, 1993. "Underinvestment and Incompetence as Responses to Radical Innovation: Evidence from the Photolithographic Alignment Equipment Industry," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 248-270, Summer.
    24. Bos, Jaap W.B. & Economidou, Claire & Sanders, Mark W.J.L., 2013. "Innovation over the industry life-cycle: Evidence from EU manufacturing," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 78-91.
    25. Anton Belyakov & Josef Haunschmied & Vladimir Veliov, 2014. "Heterogeneous consumption in OLG model with horizontal innovations," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 13(3), pages 167-193, December.
    26. Pietro Peretto & Michelle Connolly, 2007. "The Manhattan Metaphor," Journal of Economic Growth, Springer, vol. 12(4), pages 329-350, December.
    27. Cellini, Roberto & Lambertini, Luca, 2002. "A differential game approach to investment in product differentiation," Journal of Economic Dynamics and Control, Elsevier, vol. 27(1), pages 51-62, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bondarev, Anton & Greiner, Alfred, 2018. "Catching-up and falling behind: Effects of learning in an R&D differential game with spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 134-156.
    2. Anton Bondarev, 2021. "Games Without Winners: Catching-up with Asymmetric Spillovers," Dynamic Games and Applications, Springer, vol. 11(4), pages 670-703, December.
    3. Bondarev, Anton, 2018. "Does stronger intellectual property rights protection foster structural change? Effects of heterogeneity in innovations," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 26-42.
    4. Leandro M. Meller, 2022. "Patent Length and Breadth as Policy Instruments: A Systematic Review of Recent Contributions to the Theory of Optimal Patent Design," Working Papers 192, Red Nacional de Investigadores en Economía (RedNIE).
    5. Bondarev, Anton, 2018. "Heterogeneous R&D spillovers and sustainable growth: Limits to efficient regulation," Working papers 2018/04, Faculty of Business and Economics - University of Basel.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bondarev, Anton & Greiner, Alfred, 2018. "Catching-up and falling behind: Effects of learning in an R&D differential game with spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 134-156.
    2. Bondarev, Anton, 2014. "Endogenous specialization of heterogeneous innovative activities of firms under the technological spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 38(C), pages 235-249.
    3. Bondarev, Anton & Greiner, Alfred, 2019. "Endogenous Growth And Structural Change Through Vertical And Horizontal Innovations," Macroeconomic Dynamics, Cambridge University Press, vol. 23(1), pages 52-79, January.
    4. Bondarev, Anton A., 2012. "Optimal control over a continuous range of homogeneous and heterogeneous innovations with finite life-cycles," MPRA Paper 40068, University Library of Munich, Germany.
    5. Angus C. Chu & Yuichi Furukawa & Lei Ji, 2016. "Patents, R&D subsidies, and endogenous market structure in a schumpeterian economy," Southern Economic Journal, John Wiley & Sons, vol. 82(3), pages 809-825, January.
    6. Mahdiyeh Entezarkheir & Saeed Moshiri, 2021. "Innovation spillover and merger decisions," Empirical Economics, Springer, vol. 61(5), pages 2419-2448, November.
    7. Aldieri, Luigi & Aprile, Maria Carmela & Vinci, Concetto Paolo, 2015. "R&D Spillovers Effects on strategic behaviour of Large International Firms," MPRA Paper 63402, University Library of Munich, Germany.
    8. Anton Bondarev & Alfred Greiner, 2018. "Technology lock-in with horizontal and vertical innovations through limited R&D spending," 4OR, Springer, vol. 16(1), pages 51-65, March.
    9. Bondarev, Anton, 2018. "Does stronger intellectual property rights protection foster structural change? Effects of heterogeneity in innovations," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 26-42.
    10. Chu, Angus C. & Furukawa, Yuichi, 2012. "Patents versus R&D subsidies in a Schumpeterian growth model with endogenous market structure," MPRA Paper 40469, University Library of Munich, Germany.
    11. Oh, Jong-Min, 2017. "Absorptive capacity, technology spillovers, and the cross-section of stock returns," Journal of Banking & Finance, Elsevier, vol. 85(C), pages 146-164.
    12. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    13. Guido Cozzi & Silvia Galli, 2014. "Sequential R&D and blocking patents in the dynamics of growth," Journal of Economic Growth, Springer, vol. 19(2), pages 183-219, June.
    14. Angus C. Chu & Yuichi Furukawa & Sushanta Mallick & Pietro Peretto & Xilin Wang, 2021. "Dynamic effects of patent policy on innovation and inequality in a Schumpeterian economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1429-1465, June.
    15. Hean, Oudom, 2018. "The Effect of Metropolitan Technological Progress on the Non-metropolitan Labor Market: Evidence from U.S. Patent Counts," 2018 Annual Meeting, August 5-7, Washington, D.C. 274176, Agricultural and Applied Economics Association.
    16. Lee, Kyounghun & Oh, Frederick Dongchuhl & Shin, Donglim & Yoon, Heejin, 2024. "Innovation spillovers within business groups: Evidence from Korean chaebols," Emerging Markets Review, Elsevier, vol. 60(C).
    17. Banholzer, Nicolas & Behrens, Vanessa & Feuerriegel, Stefan & Heinrich, Sebastian & Rammer, Christian & Schmoch, Ulrich & Seliger, Florian & Wörter, Martin, 2019. "Knowledge spillovers from product and process inventions in patents and their impact on firm performance. End report," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 222367, March.
    18. Minniti, Antonio & Venturini, Francesco, 2017. "The long-run growth effects of R&D policy," Research Policy, Elsevier, vol. 46(1), pages 316-326.
    19. Angus C. Chu & Zonglai Kou & Xilin Wang, 2020. "Effects of patents on the transition from stagnation to growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 395-411, April.
    20. Angus Chu & Guido Cozzi & Chih-Hsing Liao, 2013. "Endogenous fertility and human capital in a Schumpeterian growth model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(1), pages 181-202, January.

    More about this item

    Keywords

    Heterogeneous innovations; Technological race; Technology spillovers; Distributed control; Differential games;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • L0 - Industrial Organization - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joevec:v:26:y:2016:i:3:d:10.1007_s00191-016-0457-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.