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Product Differentiation and Process R&D: The Trade-off Between Quality and Productivity in the Spanish Firm

Product Differentiation and Process R&D: The Trade-off Between Quality and Productivity in the... This paper proposes a theoretical model in which the incentives that product differentiation exercises on process innovation are established. The resulting quadratic relationship determines a point beyond which a trade-off between these two variables exists. The estimations based on a panel data of Spanish manufacturing firms confirm this result. Moreover, firm size seems to play a important role on process innovation only for those firms with a certain degree of product differentiation. For the rest, the degree of differentiation of rival firms is the relevant variable. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png "Journal of Industry, Competition and Trade" Springer Journals

Product Differentiation and Process R&D: The Trade-off Between Quality and Productivity in the Spanish Firm

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References (10)

Publisher
Springer Journals
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Economic Policy; R & D/Technology Policy; European Integration; Microeconomics; International Economics
ISSN
1566-1679
eISSN
1573-7012
DOI
10.1023/A:1012830631644
Publisher site
See Article on Publisher Site

Abstract

This paper proposes a theoretical model in which the incentives that product differentiation exercises on process innovation are established. The resulting quadratic relationship determines a point beyond which a trade-off between these two variables exists. The estimations based on a panel data of Spanish manufacturing firms confirm this result. Moreover, firm size seems to play a important role on process innovation only for those firms with a certain degree of product differentiation. For the rest, the degree of differentiation of rival firms is the relevant variable.

Journal

"Journal of Industry, Competition and Trade" – Springer Journals

Published: Oct 5, 2004

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