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on Technology and Industrial Dynamics |
| By: | Gordon M. Phillips; Alexei Zhdanov |
| Abstract: | We provide a model and empirical tests showing how an active acquisition market affects firm incentives to innovate and conduct R&D. Our model shows that small firms optimally may decide to innovate more when they can sell out to larger firms. Large firms may find it disadvantageous to engage in an "R&D race" with small firms, as they can obtain access to innovation through acquisition. Our model and evidence show that the R&D responsiveness of firms increases with demand, competition and industry merger and acquisition activity. All of these effects are stronger for smaller firms than for larger firms. |
| JEL: | G20 G3 G34 L11 L22 L25 O31 O34 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18346&r=tid |
| By: | Yair Tauman (Department of Economics, Stony Brook University); Debrapiya Sen (Department of Economics, Ryerson University, Toronto, ON, Canada.) |
| Abstract: | This article considers the problem of patent licensing in a Cournot oligopoly under a class of general demand functions. We consider two cases, the case where the innovator is an outsider and the one where it is one of the incumbent rms. The licensing policies considered are upfront fees, royalties and combinations of the two. It is shown that (i) for generic values of magnitudes of the innovation, a royalty policy is better than fee or auction provided the industry size is relatively large, (ii) under combinations of fees and royalties, provided the innovation is relatively signicant (or the industry size is relatively large), (a) there is always an optimal policy where the innovation is licensed to practically all rms of the industry and (b) any optimal combination includes a positive royalty. |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:nys:sunysb:12-05&r=tid |
| By: | David Pérez-Castrillo; David Wettstein |
| Abstract: | We study innovation contests with asymmetric information and identical contestants, where contestants' efforts and innate abilities generate inventions of varying qualities. The designer offers a reward to the contestant achieving the highest quality and receives the revenue generated by the innovation. We characterize the equilibrium behavior, outcomes and payoffs for both nondiscriminatory and discriminatory (where the reward is contestant-dependent) contests. We derive conditions under which the designer obtains a larger payoff when using a discriminatory contest and describe settings where these conditions are satisfied. |
| Keywords: | contests, auctions, innovations, discrimination |
| JEL: | O31 D44 J71 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:654&r=tid |
| By: | Anna Lejpras |
| Abstract: | The literature argues that research spin-offs (RSOs)-enterprises originating from a university or research institute-appear to have higher innovative potential and capabilities than other start-ups, at least in the early stages of their development. Yet, little is known about the innovative performance of these companies at later development phases. Thus, the main goal of this study is to investigate whether there are any differences in R&D and innovation behavior between established and/or mature RSOs and otherwise created firms and, if so, to what extent they are driven by networking and cooperation activities as suggested by some scholars. To this end, we employ probit regression analysis and a matching approach using survey data on more than 6,000 East German firms, among which are 179 RSOs. Our first findings suggest that established RSOs engage in R&D and innovation activities more frequently than companies whose genesis was of another type. Nevertheless, the results obtained when accounting for collaboration measures show that the precedence of RSOs in further development stages over otherwise created firms in terms of innovativeness is related to their higher intensity of cooperation activity and close, face-to-face interactions with universities, and not to type of firm creation. Moreover, our findings reveal that cooperating in various fields may be of different importance for specific inputs and outputs of the innovation activity. Finally, based on our results, we draw some implications both for practicing managers and public policymakers. |
| Keywords: | Spin-Offs, R&D, innovation, cooperation |
| JEL: | O30 M20 L20 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1237&r=tid |