Product Innovation by Incumbent Firms in Developing Economies : The Roles of Research and Development Expenditures, Trade Policy, and the Investment Climate
A model of firm innovation illustrates the effects of the threat of imitation and product varieties on a representative firm's decision to invest in research and development to produce new product varieties. The model motivates two empirical q...
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| Format: | Policy Research Working Paper |
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Washington, DC: World Bank
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/08/10064236/product-innovation-incumbent-firms-developing-economies-roles-research-development-expenditures-trade-policy-investment-climate http://hdl.handle.net/10986/6299 |
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okr-10986-62992021-04-23T14:02:30Z Product Innovation by Incumbent Firms in Developing Economies : The Roles of Research and Development Expenditures, Trade Policy, and the Investment Climate Lederman, Daniel AVAILABILITY OF DATA BUSINESS ENVIRONMENT CAPITAL INVESTMENT COMPETITOR COMPETITORS CONSTANT RETURNS CONSTANT RETURNS TO SCALE COUNTRY CHARACTERISTICS COUNTRY DUMMIES COUNTRY EFFECTS COUNTRY EXPERIENCES COUNTRY LEVEL COUNTRY LEVEL VARIABLES COUNTRY-SPECIFIC EFFECTS CREATIVE DESTRUCTION CROSS-COUNTRY DIFFERENCES DATA DEFINITIONS DEPENDENT VARIABLE DEREGULATION DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPED ECONOMIES DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIVERSIFICATION DYNAMIC PATH ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITIES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS RESEARCH ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL MODEL EMPIRICAL WORK ENTERPRISE SURVEYS ENTREPRENEURIAL SKILLS ENTREPRENEURS ENTREPRENEURSHIP EXOGENOUS FACTORS EXOGENOUS PROBABILITY EXPECTED VALUE EXPLANATORY VARIABLE EXPLANATORY VARIABLES EXPORT SECTOR EXPORTS FINANCIAL SUPPORT FIRM GROWTH FIRM PERFORMANCE FIRM SIZE GDP GDP PER CAPITA GROWTH MODELS GROWTH POLICY HETEROSKEDASTICITY HIGH CORRELATION INCOME INCOME DIFFERENTIALS INCOMES INDIVIDUAL FIRM INDIVIDUAL FIRMS INNOVATION FUNCTION INNOVATIONS INNOVATIVE FIRMS INNOVATIVE IDEAS INTEREST RATES INVENTION INVESTMENT CLIMATE KNOWLEDGE SPILLOVERS LABOR FORCE LABOR PRODUCTIVITY LAGGED DEPENDENT LICENSING MANUFACTURING MANUFACTURING INDUSTRIES MANUFACTURING INDUSTRY MARKET COMPETITION MARKET DEMAND MARKET PRICES MEASUREMENT ERROR MEASUREMENT ERRORS MEMBER COUNTRIES MISSING DATA MISSING VALUES MULTINATIONAL MULTINATIONAL CORPORATIONS NATURAL LOGARITHM NEGATIVE COEFFICIENT NEGATIVE COEFFICIENTS NEGATIVE SIGN NEW PRODUCT NEW PRODUCTS NORMAL DISTRIBUTION OPPORTUNITY COSTS PATENTS PER CAPITA INCOME POLICY IMPLICATIONS POLICY PERSPECTIVE POLICY RESEARCH POLICY VARIABLES POLITICAL ECONOMY POLITICAL STABILITY POOR COUNTRIES POSITIVE EFFECT PRIVATE AGENTS PRIVATE SECTOR PRODUCT DEVELOPMENT PRODUCT INNOVATION PRODUCT INNOVATIONS PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC SECTOR R&D REGRESSION ANALYSES REGRESSION RESULTS REGULATORY ENVIRONMENT REGULATORY POLICY REGULATORY REFORMS RELATIVE PRICES RESULT RESULTS SEARCHES TARIFF BARRIERS TECHNOLOGY DIFFUSION TELEPHONE TELEPHONE LINES TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRADE POLICIES TRADE POLICY USES VALUE ADDED WEB A model of firm innovation illustrates the effects of the threat of imitation and product varieties on a representative firm's decision to invest in research and development to produce new product varieties. The model motivates two empirical questions: (1) Is research and development partially correlated with firms' propensity to introduce new products or product innovation in developing countries? (2) Do trade policies and the national investment climate affect firms' propensity for product innovation? The econometric evidence suggests that the answers are yes and yes, but the investment climate affects product innovation in a manner that is consistent with the presence of market failures and state capture. National trade-policy distortions appear to reduce the probability of product innovation, and the density of exporting firms at the national level also seems to positively affect the propensity to introduce new products by individual firms. The paper discusses some policy implications. 2012-05-22T14:20:02Z 2012-05-22T14:20:02Z 2007-08 http://documents.worldbank.org/curated/en/2008/08/10064236/product-innovation-incumbent-firms-developing-economies-roles-research-development-expenditures-trade-policy-investment-climate http://hdl.handle.net/10986/6299 English Policy Research Working Paper; no. WPS 4319 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC: World Bank Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
AVAILABILITY OF DATA BUSINESS ENVIRONMENT CAPITAL INVESTMENT COMPETITOR COMPETITORS CONSTANT RETURNS CONSTANT RETURNS TO SCALE COUNTRY CHARACTERISTICS COUNTRY DUMMIES COUNTRY EFFECTS COUNTRY EXPERIENCES COUNTRY LEVEL COUNTRY LEVEL VARIABLES COUNTRY-SPECIFIC EFFECTS CREATIVE DESTRUCTION CROSS-COUNTRY DIFFERENCES DATA DEFINITIONS DEPENDENT VARIABLE DEREGULATION DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPED ECONOMIES DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIVERSIFICATION DYNAMIC PATH ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITIES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS RESEARCH ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL MODEL EMPIRICAL WORK ENTERPRISE SURVEYS ENTREPRENEURIAL SKILLS ENTREPRENEURS ENTREPRENEURSHIP EXOGENOUS FACTORS EXOGENOUS PROBABILITY EXPECTED VALUE EXPLANATORY VARIABLE EXPLANATORY VARIABLES EXPORT SECTOR EXPORTS FINANCIAL SUPPORT FIRM GROWTH FIRM PERFORMANCE FIRM SIZE GDP GDP PER CAPITA GROWTH MODELS GROWTH POLICY HETEROSKEDASTICITY HIGH CORRELATION INCOME INCOME DIFFERENTIALS INCOMES INDIVIDUAL FIRM INDIVIDUAL FIRMS INNOVATION FUNCTION INNOVATIONS INNOVATIVE FIRMS INNOVATIVE IDEAS INTEREST RATES INVENTION INVESTMENT CLIMATE KNOWLEDGE SPILLOVERS LABOR FORCE LABOR PRODUCTIVITY LAGGED DEPENDENT LICENSING MANUFACTURING MANUFACTURING INDUSTRIES MANUFACTURING INDUSTRY MARKET COMPETITION MARKET DEMAND MARKET PRICES MEASUREMENT ERROR MEASUREMENT ERRORS MEMBER COUNTRIES MISSING DATA MISSING VALUES MULTINATIONAL MULTINATIONAL CORPORATIONS NATURAL LOGARITHM NEGATIVE COEFFICIENT NEGATIVE COEFFICIENTS NEGATIVE SIGN NEW PRODUCT NEW PRODUCTS NORMAL DISTRIBUTION OPPORTUNITY COSTS PATENTS PER CAPITA INCOME POLICY IMPLICATIONS POLICY PERSPECTIVE POLICY RESEARCH POLICY VARIABLES POLITICAL ECONOMY POLITICAL STABILITY POOR COUNTRIES POSITIVE EFFECT PRIVATE AGENTS PRIVATE SECTOR PRODUCT DEVELOPMENT PRODUCT INNOVATION PRODUCT INNOVATIONS PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC SECTOR R&D REGRESSION ANALYSES REGRESSION RESULTS REGULATORY ENVIRONMENT REGULATORY POLICY REGULATORY REFORMS RELATIVE PRICES RESULT RESULTS SEARCHES TARIFF BARRIERS TECHNOLOGY DIFFUSION TELEPHONE TELEPHONE LINES TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRADE POLICIES TRADE POLICY USES VALUE ADDED WEB |
| spellingShingle |
AVAILABILITY OF DATA BUSINESS ENVIRONMENT CAPITAL INVESTMENT COMPETITOR COMPETITORS CONSTANT RETURNS CONSTANT RETURNS TO SCALE COUNTRY CHARACTERISTICS COUNTRY DUMMIES COUNTRY EFFECTS COUNTRY EXPERIENCES COUNTRY LEVEL COUNTRY LEVEL VARIABLES COUNTRY-SPECIFIC EFFECTS CREATIVE DESTRUCTION CROSS-COUNTRY DIFFERENCES DATA DEFINITIONS DEPENDENT VARIABLE DEREGULATION DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPED ECONOMIES DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIVERSIFICATION DYNAMIC PATH ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITIES ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS RESEARCH ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL MODEL EMPIRICAL WORK ENTERPRISE SURVEYS ENTREPRENEURIAL SKILLS ENTREPRENEURS ENTREPRENEURSHIP EXOGENOUS FACTORS EXOGENOUS PROBABILITY EXPECTED VALUE EXPLANATORY VARIABLE EXPLANATORY VARIABLES EXPORT SECTOR EXPORTS FINANCIAL SUPPORT FIRM GROWTH FIRM PERFORMANCE FIRM SIZE GDP GDP PER CAPITA GROWTH MODELS GROWTH POLICY HETEROSKEDASTICITY HIGH CORRELATION INCOME INCOME DIFFERENTIALS INCOMES INDIVIDUAL FIRM INDIVIDUAL FIRMS INNOVATION FUNCTION INNOVATIONS INNOVATIVE FIRMS INNOVATIVE IDEAS INTEREST RATES INVENTION INVESTMENT CLIMATE KNOWLEDGE SPILLOVERS LABOR FORCE LABOR PRODUCTIVITY LAGGED DEPENDENT LICENSING MANUFACTURING MANUFACTURING INDUSTRIES MANUFACTURING INDUSTRY MARKET COMPETITION MARKET DEMAND MARKET PRICES MEASUREMENT ERROR MEASUREMENT ERRORS MEMBER COUNTRIES MISSING DATA MISSING VALUES MULTINATIONAL MULTINATIONAL CORPORATIONS NATURAL LOGARITHM NEGATIVE COEFFICIENT NEGATIVE COEFFICIENTS NEGATIVE SIGN NEW PRODUCT NEW PRODUCTS NORMAL DISTRIBUTION OPPORTUNITY COSTS PATENTS PER CAPITA INCOME POLICY IMPLICATIONS POLICY PERSPECTIVE POLICY RESEARCH POLICY VARIABLES POLITICAL ECONOMY POLITICAL STABILITY POOR COUNTRIES POSITIVE EFFECT PRIVATE AGENTS PRIVATE SECTOR PRODUCT DEVELOPMENT PRODUCT INNOVATION PRODUCT INNOVATIONS PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC SECTOR R&D REGRESSION ANALYSES REGRESSION RESULTS REGULATORY ENVIRONMENT REGULATORY POLICY REGULATORY REFORMS RELATIVE PRICES RESULT RESULTS SEARCHES TARIFF BARRIERS TECHNOLOGY DIFFUSION TELEPHONE TELEPHONE LINES TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRADE POLICIES TRADE POLICY USES VALUE ADDED WEB Lederman, Daniel Product Innovation by Incumbent Firms in Developing Economies : The Roles of Research and Development Expenditures, Trade Policy, and the Investment Climate |
| relation |
Policy Research Working Paper; no. WPS 4319 |
| description |
A model of firm innovation illustrates
the effects of the threat of imitation and product varieties
on a representative firm's decision to invest in
research and development to produce new product varieties.
The model motivates two empirical questions: (1) Is research
and development partially correlated with firms'
propensity to introduce new products or product innovation
in developing countries? (2) Do trade policies and the
national investment climate affect firms' propensity
for product innovation? The econometric evidence suggests
that the answers are yes and yes, but the investment climate
affects product innovation in a manner that is consistent
with the presence of market failures and state capture.
National trade-policy distortions appear to reduce the
probability of product innovation, and the density of
exporting firms at the national level also seems to
positively affect the propensity to introduce new products
by individual firms. The paper discusses some policy implications. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Lederman, Daniel |
| author_facet |
Lederman, Daniel |
| author_sort |
Lederman, Daniel |
| title |
Product Innovation by Incumbent Firms in Developing Economies : The Roles of Research and Development Expenditures, Trade Policy, and the Investment Climate |
| title_short |
Product Innovation by Incumbent Firms in Developing Economies : The Roles of Research and Development Expenditures, Trade Policy, and the Investment Climate |
| title_full |
Product Innovation by Incumbent Firms in Developing Economies : The Roles of Research and Development Expenditures, Trade Policy, and the Investment Climate |
| title_fullStr |
Product Innovation by Incumbent Firms in Developing Economies : The Roles of Research and Development Expenditures, Trade Policy, and the Investment Climate |
| title_full_unstemmed |
Product Innovation by Incumbent Firms in Developing Economies : The Roles of Research and Development Expenditures, Trade Policy, and the Investment Climate |
| title_sort |
product innovation by incumbent firms in developing economies : the roles of research and development expenditures, trade policy, and the investment climate |
| publisher |
Washington, DC: World Bank |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/08/10064236/product-innovation-incumbent-firms-developing-economies-roles-research-development-expenditures-trade-policy-investment-climate http://hdl.handle.net/10986/6299 |
| _version_ |
1764399826923945984 |