innovation activities. The selection of high-skill managers is more important for innovation activities. As the economy … investments, but little selection. Closer to the world technology frontier, there is a switch to an innovation-based strategy with …

How does firm entry affect innovation incentives and productivity growth in incumbent firms? Micro-data suggests that … sectors which differ by their distance to the technological frontier. We show that entry threat spurs innovation incentives in … technologically advanced sectors - successful innovation allows incumbents to prevent entry. In laggard sectors it discourages …