Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/10964
Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Incumbent innovation and domestic entry
Authors: Falck, Oliver
Heblich, Stephan
Kipar, Stefan
Contact Email: stephan.heblich@stir.ac.uk
Keywords: Entry
Process innovation
Product innovation
Issue Date: Apr-2011
Publisher: Springer Verlag
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.
Type: Journal Article
URI: http://hdl.handle.net/1893/10964
DOI Link: http://dx.doi.org/10.1007/s11187-009-9219-1
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
Economics
Ifo Institute for Economic Research, Germany

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