Title: | Industry Size and the Distribution of R&D Investment |
Authors: | Asker, John Baccara, Mariagiovanna |
Keywords: | Entry;Research and Development;Product Differentiation |
Issue Date: | 8-Feb-2008 |
Series/Report no.: | EC-08-05 |
Abstract: | We analyze the link between industry size and R&D spending distribution. We consider a monopolistically competitive market in which firms can invest in cost-cutting R&D by paying a fixed cost first. For an intermediate level of fixed cost, there is a unique equilibrium in which the market segments into investing and non-investing firms. Using this equilibrium, we study how the distribution and level of R&D expenditure changes as industry size increases. In particular, we show that, as the market size increases, R&D spending can become more concentrated. Data motivating these results are drawn from the Taiwanese and Korean semiconductor industries. |
URI: | http://hdl.handle.net/2451/26013 |
Appears in Collections: | Economics Working Papers |
Files in This Item:
File | Description | Size | Format | |
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mktsize080208.pdf | 261.5 kB | Adobe PDF | View/Open |
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