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Dynamic Competition in Technological Investments: An Empirical Examination of the LCD Panel IndustryJeongsik LeeGeorgia Institute of Technology - College of Management Byung-Cheol KimGeorgia Institute of Technology Young-Mo Limaffiliation not provided to SSRN August 2010 International Journal of Industrial Organization, Vol. 29, No. 6, 2011 Abstract: When are technological laggards more likely to try to catch up with leaders? We offer empirical evidence on firm-level data of plant investments in the TFT-LCD panel industry, where technological competition has been intense and dynamic. We find that the followers' level of technology has a non-monotonic effect on technology-improving investments, with intermediate followers the most apt to invest in catch-ups. This result is a puzzle given the existing theory on technology race. We also find that followers' catch-up investments increase with the capacity of the leader that employs the state-of-the-art technology. These results are robust to variations in specification and alternative accounts of effects. We discuss our findings and contributions in light of the technology race literature.
Number of Pages in PDF File: 35 Keywords: LCD industry, Technology race, Leadership competition, Innovation, Catch-up investment, Firm heterogeneity JEL Classification: D21, L13, L63, O31, O32, O33 Accepted Paper SeriesDate posted: July 24, 2009 ; Last revised: July 24, 2012Suggested Citation |
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