This paper explores a model of innovation and spatial competition over time. A key implication of the paper is that firms’ size is positively autocorrelated across time. The mechanism that generates this persistence works only in heterogenous-product markets and is based on the idea that larger firms possess better information about the design of future products. Some corroborating evidence is cited.
|Original language||English (US)|
|Number of pages||10|
|Journal||Review of Economic Studies|
|State||Published - Jan 1987|
ASJC Scopus subject areas
- Economics and Econometrics