Market Structure and Technological Change

3. EMPIRICAL APPROACHES AND FINDINGS

3.1. Principal causal flows and variables

Economic researchers have hypothesized and tested many forms of interaction between market structure and innovation. But without doing too much violence to the range of contributions, the principal causal flows and variables investigated empirically since Schumpeter’s seminal conjectures can be depicted in a simple schema such as that of Figure 17.

FIGURE 17 Schematic depiction of flows and variables in hypothesized structure-innovation relationships.

The effect of structure on innovation is widely recognized as indirect. The resources devoted to a firm’s R & D effort ...