Vertical relationships, competition, knowledge search and innovation

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Date

2014-03-27

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Empirical evidence for German enterprises

Abstract

This thesis deals with modern topics in industrial organization and in economics of innovation in particular. It encompasses four empirical studies which are related to both the aims expressed in the Europe 2020 strategy as well as the means to reach them. Chapter 2 deals with issues of bargaining in vertical relationships. The first study of this chapter explores how bargaining affects the R&D profitability of suppliers. The results show that a supplier’s bargaining power is a crucial determinant of R&D profitability. The second study in this chapter examines if buyer power is detrimental to suppliers’ innovation incentives and shows that this is indeed the case. The negative effect of buyer power is however mitigated by downstream competition intensity if interaction effects are included. The third chapter deals with the relationship between competition intensity and innovation incentives. There is a long-standing interest in this question and the chapter contributes to the literature by supplying results derived from German firm-level data. In addition, the results of two competition measures are contrasted and the technological distance of a firm – which is argued to have an effect on firms’ innovation incentives as well – is accounted for. The results provide evidence for a negative effect of average competition levels on firms’ innovation incentives. The fourth chapter is dedicated to the knowledge search of innovative firms and explores patterns of knowledge screening in different sectors with regards to their contribution to innovation success. This chapter contributes to the rich literature on open innovation.

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Keywords

Innovation, Vertical relationships, Bargaining, Buyer power, Competition, Knowledge search, R&D, Innovation success

Subjects based on RSWK

Innovation, Vertikale Bindung, Verbraucherverhalten, Wettbewerb, Forschung und Entwicklung

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