Neoclassical economists argue that competition promotes efficiency. They consider technology as given though. In the long run technological progress is an important determinant of the level of welfare and Schumpeter argued that monopoly rents help entrepreneurs to capture the gains of R&D and...

The paper studies the degree of homogeneity of innovative behavior in order to determine empirically an industry classi¯cation of Dutch manufacturing that can be used for policy purposes. We use a two-limit tobit model with sample selection, which explains the decisions by business enterprises...