This paper centres around the question of ownership of firms and managerial competition and how these affect managers … and employees’ incentives to invest in human capital. We argue that employees’ incentives in human capital investment are … affected by both ownership and competition since both ownership structure and competition provide bargaining chips to employees …

This paper tests for the importance of cash flow on investment in fixed capital and R&D using firm-level panel data in … investment or R&D. In identical specifications for British firms, cash flow is informative about investment, although not about … the level of R&D spending conditional on the R&D participation decision. In the UK, we also find that investment is less …

This paper analyses a dynamic game of investment in R&D or advertising, where current investments change future market … conditions. It investigates whether underinvestment can be supported in equilibrium by the threat of escalation in investment … investment in equilibrium. Furthermore, potential entry is introduced into the model so as to address the issues of market …

incentive effect of competition on innovation and the effect competition has on the degree of credit rationing. I find that the … negative effect of financial constraints on firm- and aggregate-level R&D investment is most pronounced at both high and low … levels of competition. These predictions are supported by empirical evidence: The competition-innovation relationship has an …

We explain a counterintuitive empirical finding: Firms facing more import competition do more innovation. In our model …, factors are trapped inside a firm. An increase in import competition encourages a firm to innovate by reducing the opportunity … growth. With trapped factors, firms that face more import competition do relatively more innovation. The extra innovation …