IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v38y2017i2p109-124.html
   My bibliography  Save this article

How R&D Competition Affects Investment Choices

Author

Listed:
  • Thierry Lafay
  • Céline Maximin

Abstract

We analyze firm research and development investment incentives in a framework in which only one innovation can be undertaken. We assume that the probability of discovering the innovation depends on a parameter that represents the technical difficulty of innovating. We show that patent protection is not always necessary for investments to be made. With patent protection, research and development competition leads to a symmetric equilibrium. Moreover, firms over‐invest in marginal innovation but under‐invest in difficult innovation, which explains why and how public authorities should intervene to promote specific research in certain economic sectors. Copyright © 2015 John Wiley & Sons, Ltd.

Suggested Citation

  • Thierry Lafay & Céline Maximin, 2017. "How R&D Competition Affects Investment Choices," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(2), pages 109-124, March.
    • Handle: RePEc:wly:mgtdec:v:38:y:2017:i:2:p:109-124
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kai Chang & Ning Lu & Ze Sheng Li & Yi Ran Wang, 2021. "The combined impacts of fiscal and credit policies on green firm's investment opportunity: Evidences from Chinese firm‐level analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(7), pages 1822-1835, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:38:y:2017:i:2:p:109-124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.