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http://hdl.handle.net/10419/27556
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| Title: | | The Effect of Entry on R&D Investment of Leaders: Theory and Empirical Evidence  |
| Authors: | | Czarnitzki, Dirk Etro, Federico Gabriele Kraft, Kornelius |
| Issue Date: | | 2008 |
| Series/Report no.: | | ZEW Discussion Papers 08-078 |
| Abstract: | | We develop a simple model of competition for the market that shows that, contrary to the Arrow view, endogenous entry threat in a market induces the average firm to invest less in R&D and the incumbent leader to invest more. We test these predictions with a Tobit model based on a unique dataset and survey for the German manufacturing sector (the Mannheim Innovation Panel). We confirm the empirical validity of our predictions and perform a number of robustness test with instrumental variables. |
| Subjects: | | R&D Entry Endogenous market structures Leadership |
| JEL: | | O32 O31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des ZEW ZEW Discussion Papers
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