Pierre Mohnen (UNU-Merit)

Does competition increase or decrease the innovation gap between the best and the rest?

Abstract. This paper tests whether competition increases or decreases inequality in innovation performance. We exploit firm panel data from ten waves of the Swiss Innovation Survey. We distinguish between price competition and non-price competition. Competition reduces the overall inequality in innovation performance among innovators, non-price competition more than price competition. The catch-up is highest when firms start to innovate and lowest at the top of the distribution.

Joint with Spyros Arvanitis and Martin Wörter.