feature the toughest competition. Depending on the strength of competition, two sorting patterns are possible: one in which … products’ attractiveness and endogenous competition. The model is motivated by two novel stylized facts using Danish … attractive products. Our model can generate both sorting patterns depending on the value of a key preference parameter. By …

This paper studies the effect of competition on firm innovation by developing a discrete-time endogenous growth model … analysis shows that rising competition leads incumbent firms to undertake (i) more (less) internal innovation for the products … innovation. Specifically, the shift in innovation composition in response to rising competition decreases overall innovation in …