Abstract: Competition is supposed to spur innovation.
But the authors of this study found that the opposite is true for
domestic firms in emerging economies. They examined 27 “transition”
economies across eastern Europe and central Asia to understand how
globalization — foreign direct investment, trade, and increased
competition with firms operating in their home countries — affects
markets and the likelihood that incumbents will develop new products
and technologies. The authors looked at data from the 2002 and 2005
Business Environment and Enterprise Performance Survey.
Published: January 2008
Authors: Yuriy Gorodnichenko, Jan Svejnar, and Katherine Terrell