Lucke, Dorothea; Schröder, Philipp J. H.; Schumacher, … - 2004
This note explores the relationship between the price elasticity of demand and the R&D intensity of the product. We … introduce the concept of R&D intensity into a standard Dixit-Stiglitz/Krugman-type setting. R&D activity is treated as a fixed … cost of production. Within this framework, sectors with a higher R&D intensity show a lower price elasticity of demand …