Competition and Product Development Innovation: The Case of Newly Launched Trademarks

41 Pages Posted: 15 Jul 2019 Last revised: 20 Nov 2019

See all articles by Qianqian Huang

Qianqian Huang

City University of Hong Kong

Bin Yang

Jinan University - Management School

Date Written: October 3, 2018

Abstract

This paper examines the relationship between competition and product development innovation using the U.S. trademark database. We find that greater import competition spurs corporate product innovation measured by newly launched trademarks. However, such increase in foreign competition is associated with lower survival rate of new product trademarks. Moreover, firms tend to launch new trademarks in old and familiar areas in response to intensified import competition. We further show that the negative impact of competition on firm’s future performance is mitigated by product innovation. Our main results are similar when we use common domestic competition measures. Overall, our results suggest that competitive markets can promote product innovation.

Keywords: trademark; product market competition; import competition; innovation

JEL Classification: L10, O31, O32

Suggested Citation

Huang, Qianqian and Yang, Bin, Competition and Product Development Innovation: The Case of Newly Launched Trademarks (October 3, 2018). Available at SSRN: https://ssrn.com/abstract=3419613 or http://dx.doi.org/10.2139/ssrn.3419613

Qianqian Huang

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong
852-3442-0284 (Fax)

Bin Yang (Contact Author)

Jinan University - Management School ( email )

No. 601, West Huangpu Road
Guangzhou, Guangdong 510632
China

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