Learning and Strategic Product Innovation: Theory and Evidence for the Semiconductor Industry (Studies in Mathematical and Managerial Economics)

The aim of this book is to highlight a number of separate issues in the analysis of product innovation and the implications for firm behaviour. This is done by taking a close look at the semiconductor industry, where product innovation is undertaken frequently and the innovation cycles unfold in very short periods of time. There are three main themes; the first theme concerns the evolution of market share patterns, the time profile of which has shown a striking regularity and persistence over successive generations of products. A game theoretic model generates equilibrium results consistent with the basic facts observed. The second theme is about the relevance of the "learning by doing" concept in the production of semiconductors estimating the learning curve. The third theme addresses the relevance of trade policy in innovative industries. It is argued that protectionist trade policies have powerful implications for leadership product innovation.