Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/72314
Authors: 
Leahy, Dermot
Neary, James Peter
Year of Publication: 
2004
Series/Report no.: 
Working Paper Series, UCD Centre for Economic Research 04/18
Abstract: 
Empirical evidence strongly suggests that R&D increases a firm’s absorptive capacity (its ability to absorb spillovers from other firms) as well as contributing directly to profitability. We explore the theoretical implications of this. We specify a general model of the absorptive capacity process and show that costly absorption both raises the effectiveness of own R&D and lowers the effective spillover coefficient. This weakens the case for encouraging research joint ventures, even if there is complete information sharing between its members. It also implies an additional strategic pay-off to policies that raise the level of extra-industry knowledge.
Subjects: 
Absorptive capacity of R&D
competition policy
industrial policy
R&D spillovers
research joint ventures
JEL: 
O31
L13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
486.06 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.