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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.

Suggested Citation

  • Ulrich Kaiser, 2002. "R&D Spillovers and Endogenous Absorptive Capacity," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(2), pages 286-303, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200206)158:2_286:rsaeac_2.0.tx_2-p
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    References listed on IDEAS

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    1. Bernard Beaudreau, 1996. "R&D: To Compete or to Cooperate?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 4(3), pages 173-186.
    2. Amir, Rabah, 2000. "Modelling imperfectly appropriable R&D via spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1013-1032, October.
    3. James A. Brander & Barbara J. Spencer, 1983. "Strategic Commitment with R&D: The Symmetric Case," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 225-235, Spring.
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    Cited by:

    1. Salman Ali & Syed Mizanur Rahman, 2020. "R&D Expenditure in a Competitive Landscape: A Game Theoretic Approach," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 19(1), pages 47-60, June.
    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.
    3. Ben Youssef, Slim & Breton, Michèle & Zaccour, Georges, 2011. "Cooperating firms in inventive and absorptive research," MPRA Paper 35326, University Library of Munich, Germany.
    4. Lopez, Alberto, 2008. "Determinants of R&D cooperation: Evidence from Spanish manufacturing firms," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 113-136, January.
    5. Hammerschmidt, Anna, 2006. "A strategic investment game with endogenous absorptive capacity," Department of Economics Working Paper Series 92, WU Vienna University of Economics and Business.
    6. Anna Hammerschmidt, 2006. "A strategic investment game with endogenous absorptive capacity," Department of Economics Working Papers wuwp092, Vienna University of Economics and Business, Department of Economics.
    7. Kaiser, Ulrich & Kuhn, Johan M., 2012. "Long-run effects of public–private research joint ventures: The case of the Danish Innovation Consortia support scheme," Research Policy, Elsevier, vol. 41(5), pages 913-927.
    8. Samano, Mario & Santugini, Marc & Zaccour, Georges, 2017. "Dynamics in research joint ventures and R&D collaborations," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 70-92.
    9. Slim Ben Youssef & Michèle Breton & Georges Zaccour, 2013. "Cooperating and Non-cooperating Firms in Inventive and Absorptive Research," Journal of Optimization Theory and Applications, Springer, vol. 157(1), pages 229-251, April.

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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