By Sykuta M.E., Cook M.L.

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Omission of this variable can be expected to lead to biased estimates of the effect of market structure on research input or output. g. for surveys, see Kamien and Schwartz (1982), Chapter 3, or Scherer (1980), pp. 433-6). However, this said, it must also be noted that the correlation is not terribly robust. g. Phillips (1966) and Scherer (1967)). g. 30 Paul Geroski and Geoffrey Stewart Waterson and Lopez (1983), Levin et al. (1985), Lunn and Martin (1983». Finally, it also seems to be the case that the effect of concentration on innovativeness varies with certain industry characteristics.

Investigation of this controversial hypothesis is complicated by the fact that there are two possible causal mechanisms involved, and they might operate in opposing directions. First, firms which enjoy monopoly positions may enjoy higher returns from introducing a given innovation on the market. There are a variety of reasons why this might be the case, but the general presumption hinges on the notion that such firms may have a comparative advantage in deterring imitative entrants and, even if no entry occurs, may be able to appropriate a larger share of the post-innovation returns than firms in more competitive sectors.

Source: Derived from the SPRU Innovations data tape. boundaries will be called 'transfers'. Our goal is to describe innovative entry, examine how extensively such entrants diffuse their innovations throughout the economy, and ask whether it is affected by market power. There are several interesting characteristics of the type of firm which becomes an innovative entrant. First, about 12 per cent of innovative entrants were foreign-owned, principally subsidiaries of large multinational firms. Foreign-owned firms produced about 17 per cent of the total number of innovations, suggesting that the propensity to attempt an innovative entry was slightly lower for innovating foreign-owned firms.

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A New Institution Economics Approach to Contracts and Cooperatives by Sykuta M.E., Cook M.L.


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