Czarnitzki, Dirk; Etro, Federico; Kraft, Kornelius - Dipartimento di Economia, Metodi Quantitativi e … - 2009
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 than the average firm. We test these predictions with a Tobit model...