KRČÁL, Ondřej. An Explanation of the Inverted-U Relationship between Profitability and Innovation. Online. 1. elektron. Brno: Masaryk University, 2014, 160 pp. ISBN 978-80-210-7498-9. Available from: https://dx.doi.org/10.5817/CZ.MUNI.M210-7423-2014.
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Basic information
Original name An Explanation of the Inverted-U Relationship between Profitability and Innovation
Authors KRČÁL, Ondřej.
Edition 1. elektron. Brno, 160 pp. 2014.
Publisher Masaryk University
Other information
Original language English
Type of outcome Book on a specialized topic
Field of Study 50200 5.2 Economics and Business
Country of publisher Czech Republic
Confidentiality degree is not subject to a state or trade secret
Publication form electronic version available online
WWW Čítárna Munispace Internetové knihkupectví Munipress
ISBN 978-80-210-7498-9
Doi http://dx.doi.org/10.5817/CZ.MUNI.M210-7423-2014
Keywords (in Czech) inovace konkurence ekonomická efektivnost modelování simulace predikční modely monografie
Keywords in English innovations competition economic efficiency modeling simulation predictive models monograph
Tags Munipress
Tags International impact, Reviewed
Changed by Changed by: Mgr. Jana Dykastová, učo 371418. Changed: 7/5/2015 11:22.
Abstract
In this book I introduce two models of innovation that explain the inverted-U relationship between profitability and innovation, and the findings of Aghion et al. (2005) and Hashmi (2005) related to the relationship between profitability and the dispersion of productivity in the industry. The basic model provides a simple and general explanation of the empirical findings. In the basic model firms choose R&D expenditures that maximize their expected profits under the assumption that R&D expenditures of firms might be constrained by the size of their profits. The prospect-theory model provides a more specific explanation of the empirical findings, which includes a behavioral model of managerial decision-making. Managers in the model choose R&D expenditures according to the preferences represented by the prospect-theory value function. For specific sets of parameter values, both models generate predictions that correspond to the empirical findings of Aghion et al. (2005) and Hashmi (2005). Finally, I show that both models generate realistic predictions for a wider range of parameter combinations around the specific parameter values.
Links
MUNI/A/0781/2013, interní kód MUName: Regulace trhu dopravních služeb – modely, metody a aplikace (Acronym: ReDoS)
Investor: Masaryk University, Category A
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