Schumpeterian hypothesis revisited: on market structure and firms’ RD

Motivation: This article sets out to clearly elaborate upon the relationship between market structure and firms’ RD — 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 RD stage or structure in product market stage, (5) type of RD considered (process or product). The classification of standpoints on the relationship between market structure and firms’ RD is proposed. The above classification allows to understand complexity of the ‘market–RD’ links, and avoid at least some controversies over the Schumpeterian hypothesis.