Abstract
The aim of this paper is to specify a theory to explain why transitions to a market economy cause a shift to a higher level of innovation. Marketization increases the power of economic actors relative to political actors, increases inter-firm competition, creates new opportunities for entrepreneurship, and subsequently motivates innovative activity. For our empirical application, we focus on China's transition economy, which offers a broad range of institutional environments to examine the relation between market transition and increasing innovative activity by entrepreneurs and firms. (JEL: O 31, P 31, P 3)
| Original language | English |
|---|---|
| Pages (from-to) | 397-425 |
| Journal | Journal of Institutional and Theoretical Economics |
| Volume | 166 |
| Issue number | 3 |
| Publication status | Published - 2010 |
Subject classification (UKÄ)
- Economics