Hideki Yamawaki, David A. Audretsch, Import Share under International Oligopoly with Differentiated Products: Japanese Imports in U.S. Manufacturing, The Review of Economics and Statistics, Vol. 70, No. 4 (Nov., 1988), pp. 569-579

[We present a model suggesting that innovative output is influenced by R&D and market structure characteristics. Based on a new and direct measure of innovation, we find that (1) the total number of innovations is negatively related to concentration and unionization, and positively related to R&D, skilled labor, and the degree to which large firms comprise the industry; and (2) these determinants have disparate effects on large and small firms.]

The survival rates of over 11, 000 firms established in 1976 are compared across manufacturing industries. The variation in ten-year survival rates across industries is hypothesized to be the result of differences in the underlying technological regime and industry-specific characteristics, especially the extent of scale economies and capital intensity. Based on 295 four-digit standard industrial classification industries, new-firm survival is found to be promoted by the extent of small-firm innovative activity. The existence of substantial scale economies and a high capital-labor ratio tends to lower the likelihood of firm survival. However, these results apparently vary considerably with the time interval considered. Market concentration is found to promote short-run survival, while it has no impact on long-run survival. Copyright 1991 by MIT Press.

A limitation of Audretsch's 1991 study of new-firm survival was the level of aggregation to industries. This precluded linking establishment-specific characteristics, such as organizational structure and size, to post-entry performance. The purpose of this paper is to relate the post-entry performance of individual establishments not only to their technological and market structure environments, but also to establishment-specific characteristics. We do this by estimating a hazard duration function for more than 12, 000 individual establishments in U.S. manufacturing started in 1976 by tracking their subsequent performance over a ten-year period. We conclude that establishment-specific characteristics, which Audretsch was not able to capture in his earlier study, play an important role in shaping the exposure to risk confronting new establishments. Copyright 1995 by MIT Press.

The authors examine how the strategic aspect of Japanese research and development expenditures and industrial policies affected U.S.-Japanese bilateral trade during the late 1970s, and investigate which component of R&D--expenditures on process innovation, product quality improvements, new products and new technology, or technology transfer--proved to be most effective. They find that while Japanese R&D expenditures have generally promoted Japan's trade advantage, certain components of R&D have proved more effective than other. The depreciation subsidy and special status with the Ministry of International Trade and Industry is positively related to the Japanese trade performance, while legal cartelization status has not had any apparent effect. Copyright 1988 by MIT Press.

The hypothesis that the relative innovative advantage between large and small firms is determined by market concentration, the extent of entry barriers, the composition of firm size within the industry, and the overall importance of innovation activity is tested. The authors find that large firms tend to have the relative innovative advantage in industries that are capital intensive, concentrated, highly unionized, and produce a differentiated good. The small firms tend to have the relative advantage in industries that are highly innovative, utilize a large component of skilled labor, and tend to be composed of a relatively high proportion of large firms. Copyright 1987 by MIT Press.

The findings in this paper provide some insight into how small firms are able to innovate. Using a production function approach to relate knowledge generating inputs to innovative output, the empirical results suggest that small firms are the recipients of R&D spillovers from knowledge generated in the R&D centers of their larger counterparts and in universities. Such R&D spillovers are apparently more decisive in promoting the innovative activity of small firms than of large corporations. Copyright 1994 by MIT Press.