We analyze the effect of external financing and associated bankruptcy threat on the speed of product innovation in a … the R&D investment flow determines the distribution of the stochastic innovation time and the same time influences the … debt in order to speed up innovation. Furthermore, we show that, due to the existence of financial frictions, the …

homogeneous product. The firms invest in production capacities and simultaneously in R&D which determines their innovation rate … the cannibalization effect gives the smaller firm a higher innovation incentive. As a logical consequence we find that the …

We study in a dynamic framework how product innovation activities of a firm are influenced by its production capacity …

to develop the innovation and the decision to introduce the new product in the market are separated. In our multi … potential innovator strategically over-invests in process innovation. In this equilibrium the competitor over-invests in order …

innovation of its larger competitor. In equilibrium the firm with smaller capacity on the established market might outperform the …