technologies, leading to higher productivity. We propose a model of endogenous selection and innovation in heterogeneous firms that … product and process innovation (simultaneously adopting new machines and organizational practices) and adopt foreign … jointly explains the observed selection process and the innovation decisions. Further, we show in the data that innovation on …

product competition tends to increase the relative profitability of innovation for sale relative to entry. Increased …, implies that the incentive for innovation for sale can increase with increased competition. Finally, we show that a stricter …, but not too strict, merger policy tends to increase the incentive for innovations for sale by ensuring the bidding …

paper, we analyze a two-stage innovation game between one incumbent and a large number of entrants. In the first stage … innovation. In the second stage, successful entrants bid to be acquired by the incumbent. We assume that entrants cannot survive …&D approaches than the incumbent and are more likely to generate the highest value innovation. Thus, the need of entrants to be …

entrepreneurs’ choice of riskiness (quality) of an innovation project, and on their mode of commercializing the innovation (market …

This Paper examines the effect of price competition on innovation, market structure and profitability in R …&D-intensive industries. The theoretical predictions are tested using UK data on the evolution of competition, concentration, innovation …

firm's incentives for R&D. These changes influence the probability of innovation through two effects: changes in total R … shift from the rival firm to the dominant firm is a good thing as it decreases the likelihood of duplicate innovation (we … rights are strong. That is, firm dominance is good for innovation when (but only when) property rights are strong. We also …

may even reduce welfare. The reason is that it crowds our proprietary innovation, which on net may reduce total innovation …

We study optimal merger policy in a dynamic model in which the presence of scale economies implies that firms can … reduce costs through either internal investment in building capital or through mergers. The model, which we solve … the period the merger is proposed. We also find that the ability to commit can lead to a significant welfare improvement …