Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/30319 
Year of Publication: 
2009
Series/Report no.: 
Diskussionsbeiträge No. 2009/18
Publisher: 
Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft, Berlin
Abstract: 
This paper studies the innovation dynamics of an oligopolistic industry. The firms compete not only in the output market but also by engaging in productivity enhancing innovations to reduce labor costs. Rent sharing may generate productivity dependent wage differentials. Productivity growth creates intertemporal spill-over effects, which affect the incentives for innovation at subsequent dates. Over time the industry equilibrium approaches a steady state. The paper characterizes the evolution of the industry's innovation behavior and its market structure on the adjustment path.
Subjects: 
innovation
labor productivity
oligopoly
wage differentials
productivity growth
industry dynamics
JEL: 
D24
D42
D92
J31
ISBN: 
978-3-941240-11-7
Document Type: 
Working Paper

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