Schumpeterian hypothesis revisited: on market structure and firms’ R&D

Adam Karbowski



Motivation: This article sets out to clearly elaborate upon the relationship between market structure and firms’ R&D — the problem formulated by Joseph Schumpeter and widely discussed in the history of economic thought.

Aim: This paper aims to explain the main controversies which occurred in economic literature over the Schumpeterian hypothesis.

Results: The sources of controversies mentioned above are identified. Those controversies boil down to the following points: (1) ‘early’ or ‘late’ Schumpeter, (2) firm size or market power, (3) demand-side or supply-side arguments, (4) structure in R&D stage or structure in product market stage, (5) type of R&D considered (process or product). The classification of standpoints on the relationship between market structure and firms’ R&D is proposed. The above classification allows to understand complexity of the ‘market–R&D’ links, and avoid at least some controversies over the Schumpeterian hypothesis.


Schumpeterian hypothesis; market structure; firms’ R&D; economic thought

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