Effects of Firm Size and Market Structures in Technological Innovation: A Review of Literature

Abstract: This paper reviews the literature dealing with the effects of market structure and firm size on firm technological innovation. Numerous empirical studies have been conducted to investigate whether monopolies or competitive markets influenced the firms' need to actively innovate and improve productivity and product quality. The overall evidence is best characterized as mixed as the results are regarding to the importance of competition, firm size, investment climate, and countries considered (developed and developing). The growth of economies depends on the growth and survival of industries and firms. If you analyze national or multinational economies, industry competition, or company management, it is important to know how industries develop and change. A crucial part of this change, in many industries and for overall economic growth, is continual development of new or improved production methods and products.