Meet me halfway but don't rush: absorptive capacity and strategic R&D investment revisited

Article Abstract:

The study analyses how R&D investment decisions are affected by R&D spillovers between firms, taking into consideration that more R&D investment improves the ability to learn from competing firms. It is found that absorptive capacity effects increase the critical rate of spillovers that determine whether a research joint venture generates more R&D investment than non-cooperative settings.

Evaluation, Investments

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Strategic debt and patent races

Article Abstract:

A study of traditional models of R&D spending shows that the use of leverage to finance R & D affects total R & d expenditures in a patent race. Debt is shown to act as a commitment to a smaller amount of total R & D spending than when it is financed entirely by equity. Empirical results are shown that up front expenditures on R & D are more important than flow cost expenditure.

Financial management, Management dynamics, Management, Finance, Company business management, Debt financing (Corporations), Debt financing, Leverage (Finance), Leverage, Company financing

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On the role of input and output spillovers when R&D projects are risky

Article Abstract:

The impact of input and output spillovers on the expected effective cost reductions in a two-staged model of R&D, where R&D projects are risky, is observed. It is found that relative to the deterministic case, output spillovers tend to reduce expected cost reductions whereas input spillovers tend to increase investment in R&D and hence expected cost reductions.

Comparative analysis, Cost control, Cost reduction

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