Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202150
Authors: 
Amoroso, Sara
Year of Publication: 
2014
Series/Report no.: 
IPTS Working Papers on Corporate R&D and Innovation 02/2014
Abstract: 
The paper investigates the barriers to collaboration in terms of hidden transaction costs, by deriving the distribution of the operating costs and sunk costs associated with firms’ investment choices in R&D and innovation activities with or without a research partner. To retrieve both fixed and sunk costs of R&D and innovation activities with or without a research partner, we develop and estimate a structural dynamic monopoly model to quantify the linkages between R&D spending, innovation and cooperation investment choices, and endogenous productivity. We find that the sunk costs of innovations are smaller when collaborating with a research partner; the probability to spend in R&D or to innovate increases with the level of productivity, when collaborating in R&D and innovation; finally, we find that the sunk costs of innovation are 1.5 to 3 times smaller than the sunk costs of R&D. Additionally, the suggested structural framework of firm heterogeneity in cost functions offers a straightforward extension to policy impact evaluation.
Subjects: 
R&D cooperation
transaction costs
dynamic structural model.
JEL: 
D22
D23
L14
L60
O32
Document Type: 
Working Paper
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