The Impact of Industry’s Concentration on Innovation: Evidence from Russia

Корпоративные финансы

Anna Bykova¹ 

[1] Ph.D. in Economics, National Research University Higher School of Economics, Moscow, Russia;

关键词: nnovation;    firm behavior;    schumpeterian hypothesis;    inverted u-shape curve;    patents;    russia;   

DOI  :  10.17323/j.jcfr.2073-0438.11.1.2017.37-49

来源: DOAJ

【 摘 要 】

In pursuit of economic growth and development, compa-nies have tried to strike a balance between competition and monopoly power. This paper reviews evidence on industrial concentration and its economic consequences (notably firms’ performance as measured by innovation output) in the framework of emerging market conditions. Competition theory was built in developed countries un-der assumptions that do not necessarily fit emerging econ-omies. Our main research question is whether the level of local market concentration influences (and if it does, in which way) innovation activity undertaken by companies operating on emerging markets. Apart from linear associ-ation, the empirical literature suggests that industrial con-centration could exhibit an inverted U-relationship as far as its link to certain economic indicators of success, such as innovation output. We measure concentration by using the Herfindahl-Hirshman Index. This paper finds empir-ical evidence in support of the Schumpeterian hypothesis that more concentrated industries stimulate innovation and observe the inverted U-relationship curve. Further, the empirical model demonstrates the relative importance of technological leadership in concentration industries to enhance innovations. This suggests a role for recalibrating firm and industry policies.

【 授权许可】

Unknown