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Innovation and competition with human capital input

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  • Pu‐yan Nie
  • Yong‐cong Yang

Abstract

As innovation relies on human capital heavily, it attaches importance to taking human capital into account while investigating the relationship between innovation and competition. This paper establishes a game theory model to capture the effects of competition on innovation with human capital. The major findings indicate that firms with larger scale are more active in innovation investment. Meanwhile, a lessening of competition is beneficial to increase innovation if human capital input is considered. Further, both the Lerner index and social welfare are reduced under less competition. The major findings deny Arrow's conjecture and provide policy implications to improve innovation in practice.

Suggested Citation

  • Pu‐yan Nie & Yong‐cong Yang, 2023. "Innovation and competition with human capital input," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1779-1785, April.
  • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:3:p:1779-1785
    DOI: 10.1002/mde.3782
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    References listed on IDEAS

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