The Role of R&D in Oligopoly Competition: Are Companies in Oligopoly Markets More Innovative?
DOI:
https://doi.org/10.58812/wsbm.v3i01.1737Keywords:
Oligopoly Competition, Research and Development (R&D), Innovation Strategies, Market Structure, Regulatory EnvironmentAbstract
This study investigates the role of Research and Development (R&D) in fostering innovation within oligopolistic markets, addressing whether firms in these markets are more innovative compared to those in other market structures. Employing a systematic literature review approach, 15 Scopus-indexed publications were analyzed to synthesize insights on R&D intensity, innovation strategies, and the influence of regulatory environments in oligopolies. The findings reveal that firms in oligopolistic markets exhibit higher R&D intensity due to their resource capabilities and competitive dynamics. Innovation is driven by rivalry, collaborative strategies, and supportive regulatory frameworks. However, excessive market concentration can dampen innovation by reducing competitive pressures. Industry-specific trends further highlight variations in innovation outcomes, with high-tech sectors demonstrating higher R&D activity. These results have implications for policymakers and business leaders, emphasizing the need for balanced regulatory policies and strategic R&D investments to maximize innovation outcomes in oligopolistic markets.
References
[1] A. Z. Rahman, R. Hanani, H. Warsono, R. S. Astuti, and I. Riswanti, “Disaster and New Adaptations: Digital Transformation in Public Services as an impact of the COVID-19 Pandemic in Indonesia,” in TIC 2020: Proceedings of the 1st Tidar International Conference on Advancing Local Wisdom Towards Global Megatrends, TIC 2020, 21-22 October 2020, Magelang, Jawa Tengah, Indonesia, European Alliance for Innovation, 2021, p. 225.
[2] R. Awaluddin, D. Suhardi, and D. Djuniardi, “Company Position Analysis Using Porter’s Value Chain and PEST (Political, Economic, Socio-Cultural, Technological) In PT. West Java International Airport,” in UNISET 2020: Proceedings of the 1st Universitas Kuningan International Conference on Social Science, Environment and Technology, UNiSET 2020, 12 December 2020, Kuningan, West Java, Indonesia, European Alliance for Innovation, 2021, p. 159.
[3] B. Kensington-Miller, “Professional development for secondary school mathematics teachers: a peer mentoring model,” Int. J. Math. Teach. Learn., pp. 111–1473, 2012.
[4] L. Lambertini, “A Schumpeterian view of the interplay between innovation and concentration in the EU defence industry,” Def. Stud., vol. 23, no. 4, pp. 608–625, 2023.
[5] R. Sharma, “55. Schumpeterian oligopolistic rivalry,” Elgar Encycl. Econ. Knowl. Innov., p. 438, 2022.
[6] S. Amini, R. Kumar, and D. Shome, “Product market competition and corporate investment: an empirical analysis,” Int. Rev. Econ. Financ., vol. 94, p. 103405, 2024.
[7] M. Cincera, E. Ince, and A. Santos, “Competition and innovation: evidence from worldwide corporate R&D spenders,” Work. Pap. TIMES2, vol. 2019, 2019.
[8] K.-C. Ho, R. Sun, Y.-X. Li, and Z. Pan, “Supplier concentration, market power and R&D investment,” Spanish J. Financ. Accounting/Revista Española Financ. y Contab., vol. 52, no. 2, pp. 264–293, 2023.
[9] P. S. Wanaswa, Z. B. Awino, M. Ogutu, and J. Owino, “Technological Innovation and Competitive Advantage: Empirical Evidence from Large Telecommunication Firms,” Int. J. Bus. Manag., vol. 16, no. 10, pp. 1–21, 2023.
[10] M. E. Meena and J. Geng, “Dynamic competition in telecommunications: A systematic literature review,” Sage Open, vol. 12, no. 2, p. 21582440221094610, 2022.
[11] О. ОСТАПЧУК and В. МИКОЛАЙЧУК, “Технологічні інновації як ключовий чинник конкурентоспроможності на глобальному ринку,” Her. Khmelnytskyi Natl. Univ. Econ. Sci., vol. 332, no. 4, pp. 181–187, 2024.
[12] M. Canoy and M. Versteegh, “The economics of patents and innovation in pharma,” in EU Competition Law and Pharmaceuticals, Edward Elgar Publishing, 2022, pp. 48–59.
[13] L. Sandrini, “Innovation, competition, and incomplete adoption of a superior technology,” Econ. Innov. New Technol., vol. 32, no. 6, pp. 783–803, 2023.
[14] G. Grullon, Y. Larkin, and R. Michaely, “Are US industries becoming more concentrated?,” Rev. Financ., vol. 23, no. 4, pp. 697–743, 2019.
[15] X. Sun, F. Yuan, and Y. Wang, “Market power and R&D investment: the case of China,” Ind. Corp. Chang., vol. 30, no. 6, pp. 1499–1515, 2021.
[16] A. Manera, “Competing for Inventors: Market Concentration and the Misallocation of Innovative Talent,” Available SSRN 4212815, 2022.
[17] F. Delbono and L. Lambertini, “Innovation and product market concentration: Schumpeter, arrow, and the inverted U-shape curve,” Oxf. Econ. Pap., vol. 74, no. 1, pp. 297–311, 2022.
[18] K. Xu, Y. Liu, and Z. Liu, “Dynamic game model for R&D strategy in high-tech enterprises,” J. Differ. Equations Appl., vol. 29, no. 2, pp. 143–164, 2023.
[19] S. Ying, L. Miao, and C. Yibo, “High-tech products export competitiveness, BRIC countries in US market: A comparative analysis,” J. Dev. Areas, vol. 48, no. 3, pp. 195–218, 2014.
[20] C. B. Dobni, “The relationship between an innovation orientation and competitive strategy,” Int. J. Innov. Manag., vol. 14, no. 02, pp. 331–357, 2010.
[21] J.-E. de Bettignies, H. F. Liu, D. T. Robinson, and B. Gainullin, “Competition and innovation in markets for technology,” Manage. Sci., vol. 69, no. 8, pp. 4753–4773, 2023.
[22] M. Minniti and A. Palubinskas, “The influence of regulation on technological innovation and entry,” in Handbook of Innovation and Regulation, Edward Elgar Publishing, 2023, pp. 33–56.
[23] D. J. Payne, L. F. Miller, D. Findlay, J. Anderson, and L. Marks, “Time for a change: addressing R&D and commercialization challenges for antibacterials,” Philos. Trans. R. Soc. B Biol. Sci., vol. 370, no. 1670, p. 20140086, 2015.
[24] M. Park, S. Wu, and R. J. Funk, “Regulation and innovation revisited: How restrictive environments can promote destabilizing new technologies,” Organ. Sci., vol. 36, no. 1, pp. 240–260, 2025.
[25] Y. Koh and G. M. Lee, “R&D subsidies in permissive and restrictive environment: Evidence from Korea,” Res. Policy, vol. 52, no. 1, p. 104620, 2023.
[26] J. Nielsen, C. B. Tillegreen, and D. Petranovic, “Innovation trends in industrial biotechnology,” Trends Biotechnol., vol. 40, no. 10, pp. 1160–1172, 2022.
[27] I. Janjić, B. Krstić, and S. Milanović, “The impact of r&d activity on the business performance of high-technology companies,” Facta Univ. Ser. Econ. Organ., pp. 253–271, 2022.
[28] M. Neves and J. Branco, “Determinants of R&D on European high technology industry: panel data evidence,” Manag. Res. J. Iberoam. Acad. Manag., vol. 18, no. 3, pp. 285–305, 2020.
[29] A. Akıncı and H. Vergil, “EFFECT OF R&D ON PRODUCT AND PROCESS INNOVATION IN THE TURKISH MANUFACTURING INDUSTRY,” Beykent Üniversitesi Sos. Bilim. Derg., vol. 16, no. 1, pp. 8–25, 2023.
[30] O. Carvache-Franco, G. Gutiérrez-Candela, P. Guim-Bustos, M. Carvache-Franco, and W. Carvache-Franco, “Effect of R&D intensity on the innovative performance of manufacturing companies. Evidence from Ecuador, Peru and Chile,” Int. J. Innov. Sci., vol. 12, no. 5, pp. 509–523, 2020.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Loso Judijanto, Harimurti Wulandjani
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Facebook 
Instagram 
Twitter 
Youtube 
westscience.journals@gmail.com