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Price Competition, Innovation and Profitability: Theory and UK Evidence

Symeonidis, George Price Competition, Innovation and Profitability: Theory and UK Evidence. [UNSPECIFIED]

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This Paper examines the effect of price competition on innovation, market structure and profitability in R&D-intensive industries. The theoretical predictions are tested using UK data on the evolution of competition, concentration, innovation counts and profitability over 1952-77. The econometric results suggest that the introduction of restrictive practices legislation in the UK had no significant effect on the number of innovations commercialized in previously cartelized R&D-intensive manufacturing industries, while it caused a significant rise in concentration in these industries. In the short run profitability decreased, but in the long run it was restored through the rise in concentration.

Uncontrolled Keywords: L11, L13, O31, Cartels, Innovation, Manufacturing, Market Structure, Price Competition, Profitability, UK
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 16 Aug 2012 10:28
Last Modified: 17 Aug 2017 18:08

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