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Title:The Effect of Entry on R&D Investment of Leaders: Theory and Empirical Evidence PDF Logo
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:ZEW Discussion Papers
Publikationen von Forscherinnen und Forschern des ZEW

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