Abstract
Most economists believe that innovation and competition are deeply intertwined, and for many the relationship is so close that it borders on tautology. In practice, many discussions of this relationship concentrate on possible causal links which run from competition to innovation. This has been the subject of a fairly extensive literature on patent races, and another which empirically examines Schumpeterian propositions about the effects of monopoly on R&D spending or the production of patents and/or innovations.1 It is not entirely clear whether either literature generates powerful support for the proposition that competition stimulates innovation, but many people have felt able to read them that way. Arguments which suggest that innovation drives competition in markets are less often made, and they have never been articulated quite as clearly as those stressing the effects of competition on innovation.2
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Geroski, P.A. (1999). Innovation as an Engine of Competition. In: Mueller, D.C., Haid, A., Weigand, J. (eds) Competition, Efficiency, and Welfare. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5559-9_2
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DOI: https://doi.org/10.1007/978-1-4615-5559-9_2
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