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R&D Spillovers and Endogenous Absorptive Capacity

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  • Ulrich Kaiser

Abstract

This paper derives a three-stage Cournot duopoly game for research cooperation, research expenditures, and product-market competition. The amount of knowledge firms can absorb is made dependent on their own research efforts, e.g., firms' absorptive capacity is treated as an endogenous variable. It is shown that cooperating firms invest more in R&D than noncooperating firms if spillovers are sufficiently large. The degree of market competition is a key determinant of the effects of research cooperation on research efforts, implying that existing models, which usually assume perfect competition, might be too restrictive.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 158 (2002)
Issue (Month): 2 (June)
Pages: 286-

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200206)158:2_286:rsaeac_2.0.tx_2-p

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Cited by:
  1. Anna Hammerschmidt, 2006. "A strategic investment game with endogenous absorptive capacity," Department of Economics Working Papers wuwp092, Vienna University of Economics, Department of Economics.
  2. Lars Wiethaus, 2006. "Cooperation or competition in R&D when innovation and absorption are costly," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(6), pages 569-589.

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