NBER

Lai Wei

Twen Mun
Hong Kong

E-Mail: laiwei2@ln.edu.hk
Institutional Affiliation: Lingnan University

NBER Working Papers and Publications

May 2020Competition Laws and Corporate Innovation
with Ross Levine, Chen Lin, Wensi Xie: w27253
A central debate in economics concerns the relationship between competition and innovation, with some stressing that competition discourages innovation by reducing post-innovation rents and others emphasizing that more contestable markets spur currently dominant and other firms to invest more in innovation. We examine the impact of competition laws on innovation. We create a unique firm-level dataset on patenting activities that includes over 1.4 million firm-year observations, across 68 countries, from 1991 through 2015. Using a new, comprehensive dataset on competition laws, we find that more stringent competition laws are associated with increases in firms’ number of self-generated patents and the citation-impact and explorative nature of those patents. We also conduct the first examina...

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