Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70071
Authors: 
Peters, Jürgen
Year of Publication: 
1998
Series/Report no.: 
Volkswirtschaftliche Diskussionsreihe, Institut für Volkswirtschaftslehre der Universität Augsburg 173
Abstract: 
Recent econometric studies only emphasize the role of long-term demand expectations and technological capability. They neglect the impact of buyer market structure on innovative efforts of input suppliers. This paper deals with the effects of supplier and buyer market concentration, and appropriability conditions on the innovative behavior of suppliers within the German automobile industry. The data set contains firms from all size classes and measures of innovation input as well as innovation output. It can be shown that a) innovation and R&D-employment intensity will decline (increase) in buyer concentration if supplier markets are low (high) concentrated, b) buyers' pressure on input prices reduces suppliers' innovation expenditures and their incentive to develop new products, c) a small number of competitors in domestic and foreign suppliers markets and a large stock of customers stimulates innovative behavior, d) small and medium sized suppliers invest more in their innovation activities but have lower probabilities to realize innovations than larger firms, and f) higher technological capabilities lead to a higher innovation input and output.
Subjects: 
Innovation
Buyer Market Power
Appropriability
Market Structure
Firm Size
Automobile Industry
JEL: 
O31
L13
L62
Document Type: 
Working Paper

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