Competition Through Technical Progress

  • François Jeanjean
  • SSRN Electronic Journal, January 2011, Elsevier
  • DOI: 10.2139/ssrn.1677985

technical progress impact on competition-investment relationship

What is it about?

Technical progress impacts the relationship between competition and investment. The higher the technical progress the higher the required investment . The required investment (the investment that maximizes profits) may not be achieved if competition is too fierce.

Why is it important?

This paper shows that the relationship between competition and investment is not monotonic. There is a level of competition that maximizes investment. Technical progress impacts this relationship and tends to decrease the level of competition that maximizes investment. In some way, technical progress acts as a dynamic competition. This is specially important for industries that experience a high level of technical progress like information technologies or biotechnologies.

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http://dx.doi.org/10.2139/ssrn.1677985

The following have contributed to this page: Dr François H Jeanjean