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There is agreement within industrial organisation economics that an inverted U-shape relationship exists between the level of competition in an industry and the level of innovation in that industry. Thus, when consolidation changes the level of competition in an industry we might expect this to...
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-goods producers drops during recessions. We then develop a model of lumpy investment with heterogeneous firms and endogenous … equilibrium feedback accounts for the observed comovement between investment and innovation, provides a powerful propagation …
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problems of mergers are accounted for. We show that optimal investment strategies depend on the resulting market structure and …
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