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Does Easy Start-Up Formation Hamper Incumbents' R&D Investment? A Theoretical and Empirical Analysis

  • Colombo, Luca

    ()

    (Università Cattolica del Sacro Cuore)

  • Dawid, Herbert

    ()

    (University of Bielefeld)

  • Piva, Mariacristina

    ()

    (Università Cattolica del Sacro Cuore)

  • Vivarelli, Marco

    ()

    (Università Cattolica del Sacro Cuore)

This paper investigates, both theoretically and empirically, the implications that complementary assets needed for the formation of start-ups – proxied by the ease of access to financial resources – have on the innovative efforts of incumbent firms. In particular, we develop a theoretical model, highlighting a strategic incentive effect by which the innovative efforts of incumbent firms are decreasing in the availability of the complementary assets needed for the creation of a start- up. The empirical relevance of this effect is investigated by using firm level data drawn from the third Italian Community Innovation Survey covering the period 1998-2000. The results of our empirical analysis support our theory-based insights.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7302.

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Length: 21 pages
Date of creation: Mar 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7302
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