EFFECT OF CORPORATE INNOVATION ABILITY ON THE CHOICE BETWEEN PRODUCT INNOVATION AND PROCESS INNOVATION

Zeng Wu, Tian Zhilong

Resumo


With the method of duopoly game theory, the effect of firms’ innovation ability on the
choice between product and process innovation is studied. The concept of cost coefficient
of product innovation is introduced, and the criterion equation for the innovation type is
derived. The following conclusions are made: the more the product innovation ability, the
more the possibility for the firms to carry out the product innovation in both the Bertrand
and the Cournot competitions. With the decrease of the product innovation ability, for the
high-quality firms, Cournot competitor turns to select the process innovation earlier than
the Bertrand competitor. But for the low-quality firms, the Bertrand competitor would
select the process innovation firstly.

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DOI: https://doi.org/10.20946/rad.v11i2.2729

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Revista Administração em Diálogo - RAD
ISSN: 2178-0080

     

 

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