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Defensive strategies in the quality ladders
Ivan Ledezma 1, 2, 3
(10/2008)

This paper analyses the potentially defensive behaviour of successful innovators and its effect on aggregate R&D effort. It proposes a quality-ladders model that endogenously determines leader's technology advantages and who innovate (the leader firm or its competitors). Regulation can have either a positive or a negative effect on R&D intensity. It can be negatively associated to aggregate innovative effort in higly deregulated economies. In more regulated ones, where deterring strategies are constrained, it yields incentives to innovate. These predictions are consistent with data on manufacturing industries of 14 OECD countries between 1987-2003.
1 :  Centre d'économie de la Sorbonne (CES)
CNRS : UMR8174 – Université Paris I - Panthéon-Sorbonne
2 :  Laboratoire d'Economie de Dauphine - Economie de la mondialisation et du développement (LEDa - DIAL)
Université Paris IX - Paris Dauphine : EA4404
3 :  Ecole d'Économie de Paris - Paris School of Economics (EEP-PSE)
Ecole d'Économie de Paris
Sciences de l'Homme et Société/Economie et finances
innovative leaders – quality ladders – R&D – regulation – industry-level data
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