When Does Start-Up Innovation Spur the Gale of Creative Destruction?

Liquidity, Innovation, and Endogenous Growth∗

We study optimal liquidity management, innovation, and production decisions for a continuum of firms facing financing frictions and the threat of creative destruction. We show that while financing frictions prompt firms to decrease production, they may also spur investment in innovation. We examine which types of firms substitute production for innovation in response to negative operating shock...

Google & Apple ’ s Gale of Creative Destruction

Schumpeter’s Creative Destruction: A Review of the Evidence

Leapfrogging innovation competition through the process of creative destruction encourages the innovation in product and process that lengthens and improves lives. Schumpeter’s process of creative destruction emphasizes dynamic innovation competition, as contrasted with the standard model of static price competition. The ‘big-is-better’ account of creative destruction claimed, in addition, that...

Technological competition , creative destruction and the competitive process

This paper takes a simple definition of competition as a threat to established revenues. It then develops this idea as it applies to technological change through a series of illustrative examples. ‘Technological competition’ occurs only when one technology substitutes for another, for a given market. When innovation generates new uses – new markets – it does not result in technological competit...

Indices that capture creative destruction: questions and implications

The paper argues that micro and macro economists interested in the dynamics of creative destruction can gain important insights by using indices that capture the effect of innovation on the relative position of firms. This is due to the uneven and “destructive” effect that radical innovation has on firm rankings. One such index is the market share instability index. On the financial side, the e...