@techreport{Worter2010Innovation,
abstract = {This paper analyses the relationship between past innovation output, competition, and future innovation input in a dynamic econometric setting. We distinguish two dimensions of competition that correspond to the concepts of product substitutability and entry barriers due to fixed costs. Based on firm-level panel data for Germany and Switzerland we obtain consistent results for both countries. Innovation output in t-1 as measured by the sales share of innovative products is positively related to the degree of product obsolescence in t, and negatively to the degree of substitutability in t in both countries. Further, we find that rapid product obsolescence provides positive incentives for higher - primarily product-oriented - R&D investments in t+1, while high substitutability exerts negative incentives for future R&D investment.},
address = {Mannheim},
author = {Martin W\"{o}rter and Christian Rammer and Spyros Arvanitis},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {O3; 330; Innovation; R&D; Competition; Innovationswettbewerb; Produktsubstitution; Wettbewerb; Industrielle Forschung; \"{O}konomischer Anreiz; Theorie; Deutschland; Schweiz},
language = {eng},
number = {10-039},
publisher = {Zentrum f\"{u}r Europ\"{a}ische Wirtschaftsforschung (ZEW)},
title = {Innovation, competition and incentives for R&D},
type = {ZEW Discussion Papers},
url = {http://hdl.handle.net/10419/36382},
year = {2010}
}
