Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39258
Authors: 
Weiss, Pia
Year of Publication: 
2001
Series/Report no.: 
IWP Discussion Paper 2001/7
Abstract: 
For a market of horizontal product differentiation, the paper examines the effects of the level of competition on the firm's decision between a product and process innovation. When firms have to choose between the two types of innovation, it is demonstrated that both firms undertake the product innovation when the competition is intense. For intermediate levels of competition, the firms choose different investment projects, and for less intense competition, the firms pursue cost-reducing innovations. When firms may undertake both innovations, they decide to undertake a mixture of the innovations depending on the innovation cost structure. Again, the firms are willing to incur higher costs into product innovations, when the competition is initially intense.
Subjects: 
Product innovation
Process innovation
Horizontal product differentiation
JEL: 
L13
Document Type: 
Working Paper

Files in This Item:
File
Size
89.63 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.