Abstract

http://ssrn.com/abstract=2210932
 


 



Market Power, Governance and Innovation: OECD Evidence


Mehmet Ugur


University of Greenwich

November 5, 2012

M. Ugur, ed., Governance, Regulation and Innovation: Theory and Evidence on Firms and Countries, Edward Elgar, 2013

Abstract:     
The aim of this paper is to investigate the relationship between market power, governance and patenting activity in a sample of 25 OECD countries from 1988-2007. Controlling for a wide range of innovation predictors, we report that governance quality is related positively with patenting activity in the full sample and in samples of countries with higher-than-average per-capita GDP, governance scores and economic openness. Secondly, the relationship between market power and innovation has a U-shape in the full sample, but inverted-U shape in split samples. Third, when interacted with governance, market power tends to have an offsetting effect that weakens the positive relationship between governance and innovation. These findings are robust to a range of control variables such as per-capita GDP, income inequality, depth of equity markets, labour share in national income, economic globalization and military expenditures. Our findings indicate that governance is a significant factor that explain innovation and that blanket statements about the relationship between competition and innovation as well as the kind of reforms necessary to foster innovation can be misleading.

Number of Pages in PDF File: 30

Keywords: Economic governance, innovation, patenting, market power

JEL Classification: E02, B52, O3

Accepted Paper Series


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Date posted: February 4, 2013  

Suggested Citation

Ugur, Mehmet, Market Power, Governance and Innovation: OECD Evidence (November 5, 2012). M. Ugur, ed., Governance, Regulation and Innovation: Theory and Evidence on Firms and Countries, Edward Elgar, 2013. Available at SSRN: http://ssrn.com/abstract=2210932

Contact Information

Mehmet Ugur (Contact Author)
University of Greenwich ( email )
30 Park Row
Greenwich
London, SE10 9LS
United Kingdom
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