01/11/2012
Ano: 2010
Código: WPE – 223
Autores/Pesquisadores:
Abstract:
This paper analyses the relationship between R&D and market power in the Brazilian economy, using a new database: the IBMEC-SENSUS 2008 survey. Although considerably smaller than IBGE’s (Brazilian Institute of Geography and Statistics) PINTEC 2005, our database has the differential of including not only companies from the manufacturing sector, as PINTEC does, but also from the agricultural and services sectors, and having information about the demand elasticity faced by the firm. We methodologically justify the inverted-U relationship between market power and R&D, already found in the Brazilian empirical literature on the subject, using the theoretical model of Aghion et al. (2002). According to the model, we use the Lerner Index as a measure of market power instead of the less accurate HHI (Hinferdahl-Hirschman-Index). Our results show that an inverted U relationship is observed in the data, but also that this relationship relies on the simultaneous determination of R&D expenditure and market power.
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