Abstract

BOTELLO-PENALOZA, Hector Alberto  and  GUERRERO-RINCON, Isaac. Competition, market concentration and innovation in Ecuador. ecos.econ. [online]. 2019, vol.23, n.48, pp.16-33. ISSN 1657-4206.  https://doi.org/10.17230/ecos.2019.48.2.

The objective is to determine how market concentration affects firms’ decisions to innovate. With company-level data l from the 2010 Ecuadorian economic census , a probabilistic/linear model was calculated with correction for selection bias. Ecuadorian companies have a limited innovation capability and there is a persistence in market concentration. The estimates confirm the theory of market power in the propensity to innovate for both models. Consequently, increased market share leads to an increase in the likelihood of innovation, thanks to the ability to exploit the gains from these processes.

JEL Classification: D22, L26, M21, O3, O54.

Keywords : Business growth; Highgrowth companies; Job creation; Entrepeneurship; Innovation..

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