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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol, Emmanuelle / Brunner, Johann / Fleck, Robert / Mastrobuoni, Giovanni / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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Volume 16, Issue 4

Issues

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

Process and Product Innovation and the Role of the Preference Function

Andreas Hoefele
Published Online: 2017-01-19 | DOI: https://doi.org/10.1515/bejeap-2013-0132

Abstract:

In this paper I investigate the relationship between firms’ investment in product and process innovation, in particular how this relationship is affected by the consumer’s valuation for variety. Depending on the strength of the consumer’s value of variety, the aggregate demand increases with a higher degree of product innovation, which I call the market-expansion effect. I show that the two types of investment are positively related if the market expansion effect is strong.

Keywords: preference function; process innovation; product innovation

References

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About the article

Published Online: 2017-01-19

Published in Print: 2016-10-01


Citation Information: The B.E. Journal of Economic Analysis & Policy, Volume 16, Issue 4, 20130132, ISSN (Online) 1935-1682, ISSN (Print) 2194-6108, DOI: https://doi.org/10.1515/bejeap-2013-0132.

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