We model a three-stage duopolistic game where firms first simultaneously choose the technological direction of their innovation, then invest in the chosen direction, and finally, compete. Investments can be in competing or non-competing innovations and their outcome is uncertain. If successful,...

This paper estimates the effects of innovations on productivity growth and the productivity elasticity of R&D capital. Firms need to introduce or improve products or production processes over time first to satisfy market needs, second to cope with increased competition from diffusion phenomena....

In this paper empirical evidence is presented on the elasticity of private R&D spending on its price. A censored panel-data regression model with random effects is applied to a balanced panel of 726 Italian firms over the 1992-97 period. Implied estimates point out that Italian firms' response...

By exploiting a rich firm level data-base, this paper presents novel empirical evidence on the effect of process and product innovations on productivity, as well as on the role played by R&D and fixed capital investment in enhancing the likelihood of introducing innovations at the firm level....