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- Title
Product life cycles, product innovation and firm growth.
- Authors
Murakami, Hiroki
- Abstract
This paper studies research and development (R &D) for product innovation of firms faced with "product life cycles." We represent the concept of product life cycles with bounded revenue and profit functions and describe R &D for product innovation as an activity to control the "birth rate of a new product" (i.e., the probability of product innovation). We then derive the optimal level of R &D, corresponding to the optimal birth rate of a new product, and show that the growth rate of the firm's expected total revenue converges to the optimal birth rate of a new product in the long run.
- Subjects
PRODUCT life cycle; INNOVATIONS in business; BIRTH rate; BUSINESS revenue; NEW product development
- Publication
Annals of Operations Research, 2024, Vol 337, Issue 3, p873
- ISSN
0254-5330
- Publication type
Article
- DOI
10.1007/s10479-023-05605-x