No Pain, No Gain: An R&D Model with Endogenous Absorptive Capacity
I investigate how the introduction of the absorptive-capacity hypothesis changes the results of strategic investment games with exogenous spillover. As a novelty, this paper distinguishes between two different components of R&D: absorptive R&D and inventive R&D . It is demonstrated that a new effect appears: The absorptive-capacity effect now counteracts the free-rider effect of the traditional models. The findings show that firms will invest more in R&D to strengthen absorptive capacity when the spillover parameter is higher. To learn from its competitor, a firm needs to develop its absorptive capacity: no pain, no gain.
Volume (Year): 165 (2009)
Issue (Month): 3 (September)
|Contact details of provider:|| Web page: https://www.mohr.de/jite|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- d'Aspremont, Claude & Jacquemin, Alexis, 1988.
"Cooperative and Noncooperative R&D in Duopoly with Spillovers,"
American Economic Review,
American Economic Association, vol. 78(5), pages 1133-1137, December.
- d'ASPREMONT, Claude & JACQUEMIN, Alexis, "undated". "Cooperative and noncooperative R&D in duopoly with spillovers," CORE Discussion Papers RP 823, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Amir, Rabah, 2000. "Modelling imperfectly appropriable R&D via spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1013-1032, October.
- Rabah Amir, 1998. "Modelling Imperfectly Appropriable R&D via Spillovers," CIE Discussion Papers 1998-07, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Cassiman, Bruno & Perez-Castrillo, David & Veugelers, Reinhilde, 2002. "Endogenizing know-how flows through the nature of R&D investments," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 775-799, June.
- Cassiman, Bruno & Pérez-Castrillo, J David & Veugelers, Reinhilde, 2000. "Endogenizing Know-How Flows Through the Nature of R&D Investments," CEPR Discussion Papers 2622, C.E.P.R. Discussion Papers.
- Cassiman, Bruno & Pérez-Castrillo, David, 2000. "Endogenizing know-how flows through the nature of R&D investments," IESE Research Papers D/428, IESE Business School.
- David Pérez-Castrillo & Bruno Cassiman & Reinhilde Veugelers, 2000. "Endogeneizing know-how flows through the nature of R&D investments," UFAE and IAE Working Papers 464.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Bruno Cassiman & David Pérez Castrillo & Reinhilde Veugelers, 2000. "Endogeneizing know-how flows through the nature of R&D investments," Economics Working Papers 512, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2001.
- Zvi Griliches, 1958. "Research Costs and Social Returns: Hybrid Corn and Related Innovations," Journal of Political Economy, University of Chicago Press, vol. 66, pages 419-419.
- Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
- Joseph E. Stiglitz & G. Frank Mathewson (ed.), 1986. "New Developments in the Analysis of Market Structure," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262690934, January. Full references (including those not matched with items on IDEAS)