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.

Ivan Allen College Contributors:
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
  • Industry Studies
Related Links:
Related Departments:
  • School of Economics