|Appears in Collections:||Economics Journal Articles|
|Peer Review Status:||Refereed|
|Title:||Incumbent innovation and domestic entry|
|Citation:||Falck O, Heblich S & Kipar S (2011) Incumbent innovation and domestic entry, Small Business Economics, 36 (3), pp. 271-279.|
|Abstract:||This paper analyzes the escape-entry incentive for innovation by incumbent firms. The threat posed by the possibility of leading-edge firms entering the market influences incumbent innovation. To overcome problems of endogeneity, we apply an instrumental variable approach to analyze a rich firmlevel dataset (1987-2000) for Germany. We find evidence that domestic entry has a negative effect on incumbent product innovation, which is a strong indication of new entrants' comparative advantage in commercializing new ideas. In contrast, domestic entry has a positive effect on incumbent process innovations, an effect also known as the escape-entry effect.|
|Rights:||The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.|
|Affiliation:||Ifo Institute for Economic Research, Germany|
Ifo Institute for Economic Research, Germany
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