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http://hdl.handle.net/10419/25408
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| Title: | | Innovation and market concentration with asymmetric firms  |
| Authors: | | Escrihuela-Villar, Marc |
| Issue Date: | | 2004 |
| Series/Report no.: | | CFS Working Paper 2004/03 |
| Abstract: | | This paper considers a theoretical model of n asymmetric firms that reduce their initial unit costs by spending on R&D activities. In accordance with Schumpeterian hypotheses we obtain that more efficient (bigger) firms spend more in R&D and this leads to a more concentrated market structure. We also find a positive relationship between innovation and market concentration. This calls for a corrective tax on R&D activities to curtail strategic incentives to over-invest in R&D trying to achieve a higher market share. |
| Subjects: | | R&D Asymmetries Market Concentration Optimal Industrial Policies |
| JEL: | | L11 L52 O31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CFS Working Paper Series, Universität Frankfurt a. M.
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