Impact of Competition on Innovation When Selling through an Intermediary Retailer

21 Pages Posted: 9 Dec 2010 Last revised: 2 Jun 2012

See all articles by Jingqi Wang

Jingqi Wang

Northwestern University - Kellogg School of Management

Hyoduk Shin

University of California, San Diego (UCSD) - Rady School of Management

Date Written: May 31, 2012

Abstract

We explore the impact of competition on innovation in a supply chain consisting of upstream manufacturers investing in innovation and a downstream retailer selling to consumers. We find that the competition between manufacturers induces more innovation. Moreover, the competition affects the inferior manufacturers innovation investment more than the superior manufacturers. In addition, studying the effect of complementary innovative-component manufacturers, we demonstrate that under the presence of a complementary component manufacturer, competition fosters even more innovation by all manufacturers.

Suggested Citation

Wang, Jingqi and Shin, Hyoduk, Impact of Competition on Innovation When Selling through an Intermediary Retailer (May 31, 2012). Available at SSRN: https://ssrn.com/abstract=1722426 or http://dx.doi.org/10.2139/ssrn.1722426

Jingqi Wang

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Hyoduk Shin (Contact Author)

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

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