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Competition & Innovation: Evidence from U . S . Patent and Productivity Data
Author(s) -
Correa Juan A.,
Ornaghi Carmine
Publication year - 2014
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/joie.12050
Subject(s) - competition (biology) , monopoly , productivity , economics , market power , technological change , industrial organization , microeconomics , macroeconomics , ecology , biology
Is there any evidence that innovation and technological progress are constrained by competition and fostered by monopoly power? Our results, based on a constructed dataset of U . S . manufacturing industries observed over more than two decades, suggest that this is not the case. On the contrary, using both patent statistics and productivity growth as alternative measures of innovation and technological change, we observe faster technological advances in more competitive markets. These results are robust to changes in the econometric techniques used to model nonlinearity in the competition‐innovation relationship and to alternative methods of computing market power.