Aghion, Philippe; Blundell, Richard; Griffith, Rachel; … - 2006
How does firm entry affect innovation incentives in incumbent firms? Micro data suggest that there is heterogeneity … foreign firm entry in technologically advanced industries, but not in laggard industries. To explain this pattern, we use a … Schumpeterian growth model with entry and multiple sectors which differ by their distance to the world technology frontier. We show …