Competition and Innovation: An Inverted-U Relationship*

Aghion, Philippe; Bloom, Nick; Blundell, Richard; Griffith, Rachel; Howitt, Peter

doi:10.1162/0033553053970214

Cited by 1,251 publications

(1,308 citation statements)

References 20 publications

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“…First, infrastructure-based competition has an inverted 'U' effect on NGA investment. 30 This result follows the AGHION et al (2005) hypothesis that the largest influence on innovation (or innovative investments) is exerted in an environment that is neither perfectly competitive nor monopolistic. In the BRIGLAUER, ECKER and GUGLER (2012) case, the main variable for infrastructure competition is the market share of cable.…”

Section: Empirical Estimates Of Regulatory Effects On Investmentsupporting

confidence: 61%

The Endgame of Telecommunications Policy? A Survey

Vogelsang

2013

Review of Economics

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Telecommunications policy has come a long way from regulation of vertically integrated monopolies to the current state of competition. As competition becomes selfsustainable, will telecommunications policy in the form of industry-specific regulation go away or, if not, what form will it take? The economics literature suggests that the regulatory efficiency frontier is shifted by new technological and market developments, such as convergence of networks, fixed-mobile substitution (and integration) and next generation access networks. The frontier is also affected by the existing capital stock and other physical and institutional characteristics of a country. The insights from a review of the theoretical and empirical literature are applied to five policy areas. They are: (1) termination monopoly; (2) local bottleneck access; (3) net neutrality; (4) spectrum management; and (5) universal service. While in some of them, deregulation and a move to competition policy will soon be the efficient state of the art, regulation will remain efficient in others for some time. Deregulation will likely become efficient for one-way access and universal service, with the exception of some universal service policies in remote areas and for the poor. Termination will move to bill and keep with a duty to interconnect. In addition, some (more symmetric) regulation should persist for net neutrality in the form of transparency requirements, (quasi-) common carrier obligations and minimum quality standards. Also, spectrum management, while moving towards full-blown ownership rights, will continue to see regulators providing zoning and other services, particularly for unlicensed spectrum. All these assessments are premised on the success of making additional spectrum as the key resource available. They are also premised on the absence of a killer technology like P2P FTTH that potentially dominates all other technologies. What determines the endgame in telecommunications regulation? Although technical and market developments will dominantly shape the regulatory efficiency frontier, institutional and political economy factors have an additional and mostly slowing effect on policy changes. (JEL: L43; L86; L96; L98.

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Section: Empirical Estimates Of Regulatory Effects On Investmentsupporting

confidence: 61%

The Endgame of Telecommunications Policy? A Survey

Vogelsang

2013

Review of Economics

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“…Several transmission channels allow further benefits due to the relationship of banking and the economy (e.g., Rajan and Zingales, 1998;Aghion et al, 2005 and This paper analyzes the attractiveness of major European financial centers, the influence of location factors on the quality of the microeconomic business environment and their impact on the attractiveness over time. The relevance of changes in location factors have thus far only been subject to speculation, but have never been measured empirically.…”

Section: Introductionmentioning

confidence: 99%

Lessons of the Financial Crisis for the Attractiveness of European Financial Centers

Lang

2012

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical summaryThis empirical analysis addresses the attractiveness of European financial centers. The presented research tackles an issue that is fundamental to the understanding of organizational behavior in finance -the rationale in the decision-making process of market participants and its consequences for an economy. The results provide a unique insight into market participants' views on factors that affect the locational attractiveness of a financial center over time, taking into account assessments before, during, and after the financial crisis. This analysis of market participants' views is carried out by explaining their assessment of financial centers' attractiveness with their assessment of central influencing factors.In particular, the results reveal that cluster concentration with a speedy information exchange within dense social networks is a competitive advantage. In comparison, an existing specialized pool of labor without concentration seems not to be relevant, as the human capital factor is relatively mobile in an increasingly integrated Europe. Furthermore, governmental support and parameters of regulation strongly determine a location's attractiveness for financial institutions, whereas the level of taxation seems not to be important on the micro level. Despite some progress in establishing a level playing field in the EU, the financial market is not yet fully harmonized and countries can take different paths in regulation as long as there is scope for interpretation. Hence, even minor differences in financial regulation within the EU may lead to regulatory arbitrage. Overall, financial centers' attractiveness varies over time, in comparison to relatively persistent location factors. The findings do not hinge on differences in market participants' socio-economic background. It is shown that fund companies seem to value the attractiveness of a financial center much more than banks, insurance companies, and corporates. Das Wichtigste in Kürze Lessons of the Financial Crisis for the Attractiveness of European Financial CentersGunnar Lang 1 Centre for European Economic Research (ZEW), Mannheim, GermanyAbstract: This paper analyses fundamental location factors for the financial industry by investigating the economic significance of market participants' assessments of location factors and country-specific characteristics over time. A unique data set allows studying the locational attractiveness of financial centers before, during, and after ...

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“…23 Particularly important is the group of models that also include the pre-innovation product markets. For example, Aghion et al (2001Aghion et al ( , 2005 show that whether strong competition (in sectors with "neck and neck competitors") or market power (with leading and laggard competitors) lead to higher innovation incentives depends on the question whether in these sectors the incentives through "Schumpeterian rents" are larger or smaller than the incentives through the "escape-competition effect". These results are in line with the models of Boone (2000Boone ( , 2001) who analyzed the effects of weak or intense competitive pressure on innovation incentives.…”

Section: Competition and Innovation: What Do We Know?mentioning

confidence: 99%

Competition, Innovation, and Competition Law: Dissecting the Interplay

Kerber

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. thorities should use for investigating innovation effects, e.g., in merger cases. This paper, on one hand, reviews briefly our economic knowledge about competition and innovation, and claims that it is necessary to go beyond the limited insights that can be gained from industrial economics research about innovation (Schumpeter vs. Arrow discussion), and take into account much more insights from innovation research, evolutionary innovation economics, and business and management studies. On the other hand, it is also necessary to develop much more innovation-specific assessment concepts in competition law (beyond the traditional product market concept). Using the example of assessing innovation competition in merger cases, this article suggests to analyze much more systematically the resources (specialized assets) that are necessary for innovation. Terms of use: Documents inThis concept is directly linked to the new discussion about the Dow/DuPont case in the EU and about data as necessary resource for (data-driven) innovation.

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Competition and Innovation: An Inverted-U Relationship*

Cited by 1,251 publications

References 20 publications

The Endgame of Telecommunications Policy? A Survey

The Endgame of Telecommunications Policy? A Survey

Lessons of the Financial Crisis for the Attractiveness of European Financial Centers

Competition, Innovation, and Competition Law: Dissecting the Interplay

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