Does competitive pressure foster innovation? In addressing this important question, prior studies ignored a distinction … between discrete innovation aiming at entirely new technology and continuous improvement consisting of numerous incremental … innovation will lead to a much richer understanding of the interplay between firms' incentives to innovate and competitive …

Does competitive pressure foster innovation? In addressing this important question, prior studies ignored a distinction … between discrete innovation aiming at entirely new technology and continuous improvement consisting of numerous incremental … innovation will lead to a much richer understanding of the interplay between firms’ incentives to innovate and competitive …

using a patentability requirement--a minimum innovation size required for patents. A patentability requirement can stimulate … to innovation …

. The paper confirms the insight of the innovation literature, that competition induces firms to specialize and upgrade the …, thereby directing technical change toward diversification. The predictions are tested with data on Italian firms' innovation …