NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Waves of Creative Destruction: Customer Bases and the Dynamics of Innovation

Jeremy C. Stein

NBER Working Paper No. 4782
Issued in June 1994
NBER Program(s):   CF

This paper develops a model of repeated innovation with knowledge spillovers. The model's novel feature is that firms compete on two dimensions: 1) product quality or cost, where one firm's innovation ultimately spills over to other firms; and 2) distribution costs, where there are no spillovers across firms and where incumbent firms' existing customer bases give them a competitive advantage over would- be entrants. Customer bases have two important consequences: 1) they can in some circumstances dramatically reduce the long-run average level of innovation; 2) they lead to endogenous bunching, or waves, in innovative activity.

download in pdf format
   (391 K)

email paper

This paper is available as PDF (391 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4782

Published: Stein, Jeremy C. "Waves Of Creative Destruction: Firm-Specific Learning-By-Doing And The Dynamics Of Innovation," Review of Economic Studies, 1997, v64(219,Apr), 265-288.

Users who downloaded this paper also downloaded these:
Akcigit and Kerr w16443 Growth Through Heterogeneous Innovations
Chun, Kim, Morck, and Yeung w13011 Creative Destruction and Firm-Specific Performance Heterogeneity
Moser and Voena w15598 Compulsory Licensing - Evidence from the Trading with the Enemy Act
Jovanovic and Tse w12520 Creative Destruction in Industries
Kremp and Mairesse w10237 Knowledge Management, Innovation, and Productivity: A Firm Level Exploration Based on French Manufacturing CIS3 Data
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us