Innovation, firm size and market structure

This paper surveys the empirical literature on the links between innovation, market structure and firm size. The review shows that there is little evidence in support of the Schumpeterian hypothesis that market power and large firms stimulate innovations: R&D spending seems to rise more or less proportionally with firm size after a certain threshold level has been passed, and there is little evidence of a positive relationship between R&D intensity and concentration in general. However, positive linkages between concentration/size and innovative activity can occur when certain conditions are met, including high sunk costs per individual project, economies of scale and scope in the production of innovation rents. Recent empirical work suggests that R&D intensity and market structure are jointly determined by technology, the characteristics of demand, the institutional framework, strategic interaction and chance ... Cet article passe en revue la litterature empirique concernant les liens entre innovation, structure de marche et taille de l’entreprise. Il montre le manque de preuves en faveur des hypotheses schumpeteriennes selon lesquelles l’innovation serait stimulee par la puissance du marche et l’existence de grosses societes : les depenses de R-D semblent croitre de maniere plus ou moins proportionnelle avec la taille de l’entreprise apres qu’un certain seuil a ete franchi, et peu de signes attestent d’une relation positive entre intensite de la R-D et concentration en general. Cependant, des liens positifs entre concentration/taille et activite innovante peuvent s’etablir sous certaines conditions, parmi lesquelles l’existence de couts fixes eleves par projet individuel, d’economies d’echelle et de gamme dans la production d’innovations, de contraintes financieres, et de difficultes a s’approprier les rentes liees a l’innovation. Des travaux empiriques recents semblent indiquer que ...