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Spillovers And Absorptive Capacity In A Patent Race

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  • CHRISTINE HALMENSCHLAGER

Abstract

This paper explores the impacts of absorptive capacity on the behavior of innovating firms competing in a dynamic patent race. We introduce spillovers and absorptive capacities in the Fudenberg, Gilbert, Stiglitz and Tirole patent race with memory. First, we show that incorporating absorptive capacity has different effects according as the firm leads or follows in the race. While the leader is getting soft, the follower revives, allowing him to possibly catch up with the leader. Second, we find that spillovers with absorptive capacities tend to increase the pace of innovation, a somewhat paradoxical outcome.

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  • Christine Halmenschlager, 2006. "Spillovers And Absorptive Capacity In A Patent Race," Manchester School, University of Manchester, vol. 74(1), pages 85-102, January.
    • Handle: RePEc:bla:manchs:v:74:y:2006:i:1:p:85-102
    DOI: 10.1111/j.1467-9957.2006.00484.x
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    Cited by:

    1. Wang, Jue & Liu, Xiaming & Wei, Yingqi & Wang, Chengang, 2014. "Cultural Proximity and Local Firms’ catch up with Multinational Enterprises," World Development, Elsevier, vol. 60(C), pages 1-13.
    2. Horst Feldmann, 2013. "Technological unemployment in industrial countries," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1099-1126, November.
    3. Jan Van Hove, 2008. "The Impact of R&D Spillovers on Export Value: Does the Transmission Channel matter?," Working Papers 2008.3, International Network for Economic Research - INFER.
    4. Olga Slivko & Bernd Theilen, 2014. "Innovation or imitation? The effect of spillovers and competitive pressure on firms’ R&D strategy choice," Journal of Economics, Springer, vol. 112(3), pages 253-282, July.

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