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Does easy start-up formation hamper incumbents’ R&D investment?

Author

Listed:
  • L. Colombo

    (Università Cattolica del Sacro Cuore)

  • H. Dawid

    (Bielefeld University)

  • M. Piva

    (Università Cattolica del Sacro Cuore)

  • M. Vivarelli

    (Università Cattolica del Sacro Cuore
    UNU-MERIT
    IZA)

Abstract

This paper investigates the implications that complementary assets needed for the formation of start-ups have on the innovative efforts of incumbent firms. In particular, we highlight a strategic incentive effect by which the innovative efforts of incumbents are decreasing in the availability of the complementary assets needed for the creation of a start-up. Furthermore, we argue that the R&D investments of incumbents are positively related to the presence of policy support to innovation, and to the firm’s endowment of human capital. The empirical relevance of our theoretical hypotheses is investigated—and supported—by using firm level data.

Suggested Citation

  • L. Colombo & H. Dawid & M. Piva & M. Vivarelli, 2017. "Does easy start-up formation hamper incumbents’ R&D investment?," Small Business Economics, Springer, vol. 49(3), pages 513-531, October.
    • Handle: RePEc:kap:sbusec:v:49:y:2017:i:3:d:10.1007_s11187-017-9900-8
    DOI: 10.1007/s11187-017-9900-8
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    Cited by:

    1. Zachary Cohle, 2019. "Explaining the Current Innovative R&D Outsourcing to Developing Countries," Journal of Industry, Competition and Trade, Springer, vol. 19(2), pages 211-234, June.
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    3. Crowley, Frank & Jordan, Declan, 2018. "The trade-off between absorptive capacity and appropriability of the returns to innovation effort," SRERC Working Paper Series SRERCWP2018-2, University College Cork (UCC), Spatial and Regional Economic Research Centre (SRERC).
    4. Veugelers, Reinhilde & Ferrando, Annalisa & Lekpek, Senad & Weiss, Christoph T., 2018. "Young SMEs: Driving innovation in Europe?," EIB Working Papers 2018/07, European Investment Bank (EIB).

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    More about this item

    Keywords

    R&D; Innovation; Start-up; Complementary assets;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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