Dynamic Competition in Technological Investments: An Empirical Examination of the LCD Panel Industry

Title: Dynamic Competition in Technological Investments: An Empirical Examination of the LCD Panel Industry
Format: Journal Article
Publication Date: November 2011
Description:

When are technological laggards more likely to try to catch up with leaders? We offer empirical evidence on firm-level data of plant investments in the TFT-LCD panel industry, where technological competition has been intense and dynamic. We find that the followers' level of technology has a non-monotonic effect on technology-improving investments, with intermediate followers the most apt to invest in catch-ups. This result is a puzzle given the existing theory on technology race. We also find that followers' catch-up investments increase with the capacity of the leader that employs the state-of-the-art technology. These results are robust to variations in specification and alternative accounts of effects. We discuss our findings and contributions in light of the technology race literature.

External Contributors: Jeongsik Lee, Young-Mo Lim
Citation:

Lee, Jeongsik, Byung-Cheol Kim, and Young-mo Lim. "Dynamic Competition in Technological Investments: An Empirical Examination of the LCD Panel Industry." International Journal of Industrial Organization 29.6 (2011):  718-728.

Categories:
  • Industrial Organization
Related Links:
Related Departments:
  • School of Economics