Demand-Driven Innovation and Spatial Competition Over Time
- 1 January 1987
- journal article
- Published by Oxford University Press (OUP) in The Review of Economic Studies
- Vol. 54 (1) , 63-72
- https://doi.org/10.2307/2297446
Abstract
This paper explores a model of innovation and spatial competition over time. A key implication of the paper is that firms' size is positively autocorrelated across time. The mechanism that generates this persistence works only in heterogenous-product markets and is based on the idea that larger firms possess better information about the design of future products. Some corroborating evidence is cited.Keywords
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