Information Technology and the Dynamics of Joint Innovation
AbstractWe develop a model of an innovative industry to examine how information technology, by both enhancing matching efficiency and knowledge sharing, can have an ambiguous effect on the total amount of innovation. We consider a population of firms holding different knowledge expertise, and forming partnerships to conduct joint R&D. We assume that bringing together different expertise has positive value for innovating but also that joint innovation implies a partial convergence of the partners'' expertise. We study how the distribution of firms changes and thus how the innovative potential of the economy evolves. We show that as heterogeneity is used as an input by the innovative process, the industry must eventually collapse to a unique expertise, but how fast this takes place depends on the quality of IT. As a result of falling dispersion, a tension arises between static and dynamic efficiency. JEL Classification Numbers: C78,O33,O38.
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Bibliographic InfoPaper provided by Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology in its series Research Memoranda with number 014.
Date of creation: 2004
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mathematical economics and econometrics ;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
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