ABSTRACT

Innovation and competition are two major pillars in the information technology (IT) industry. In this paper, we examine the causal relationship between product market competition and innovations in the IT industry. We measure the innovations from both the quantity (number of patents) and the quality (number of non-self citations) perspectives. Based on the Herfindahl-Hirschman Index and natural experiments, we find robust evidence that the competition has a positive effect on the innovations of the IT industry. Specifically, after the exogenous shock to the market (import tariff cuts and thus increased industry competition), the number of patents per IT firm increases by 27.3 percent, and the number of non-self citations per IT firm increases by 38.2 percent on average. The effects are more pronounced in the more competitive sectors. Our study highlights the importance of the competition in the IT industry and suggests that the positive effect of competition on innovation in the IT context is likely to be driven by the parallel search effect. Our findings contribute to the recent policy debate and suggest that reducing import barriers may bring important welfare gains through innovations in the IT industry.

摘要

创新和竞争是信息技术（IT）行业的两大支柱。在本文中，我们研究了产品市场竞争与 IT 行业创新之间的因果关系。我们从数量（专利数量）和质量（非自引数量）两个角度衡量创新。基于 Herfindahl-Hirschman 指数和自然实验，我们发现了强有力的证据表明竞争对 IT 行业的创新具有积极影响。具体而言，在受到市场外生冲击（进口关税下调，从而加剧行业竞争）后，每家IT企业的专利数量平均增长27.3%，每家IT企业的非自引数量平均增长38.2%。在竞争更激烈的行业，这种影响更为明显。我们的研究强调了 IT 行业竞争的重要性，并表明竞争对 IT 环境中创新的积极影响很可能是由平行搜索效应驱动的。我们的研究结果有助于最近的政策辩论，并表明减少进口壁垒可能会通过 IT 行业的创新带来重要的福利收益。