Enterprise Group: Innovation, Transformation, and Growth

Author: Zhang Jianzhong / Country: Mainland China
Publisher:
Publish Date: 2000-07-01
Features: Under the influence of Schumpeter's innovation theory, a large number of economists have conducted theoretical and empirical research on the relationship between market structure, firm size, and technological innovation. Edwin Mansfield, one of the key figures of neo-Schumpeterianism and an American economist, used regression statistical analysis models to analyze the role of large firms in technological innovation based on a large amount of statistical data. The conclusions drawn were: ① Large firms account for a significant proportion of total innovation and have a major influence; ② The proportion of innovation by large firms is correlated with their market share, but not strictly proportional, as it depends on the industry's state; ③ The role of small firms in innovation seems to be declining. The research results of two other American economists, Morton Kamien and Nancy Schwartz (1972, 1975, 1984), showed that there are three main factors determining technological innovation: ① Degree of competition. Competition creates the necessity for innovation and determines its intensity. Through technological innovation, firms can achieve higher profits than their competitors. ② Firm size. The larger the firm, the stronger its innovative capacity, and the larger the market it can open up through innovation. This makes technological innovation by firms both necessary (triggered by market competition and demand) and possible (due to their strong innovative capacity). ③ Degree of monopoly. The higher the degree of monopoly that one or more firms have over certain markets, the stronger their market control, and the more difficult it is for innovation to be imitated, thus prolonging the effectiveness of the same innovation. Townshend (H. Townsend) and others believed that innovation is high-risk and requires high monopoly profits as R