Absorptive capacity and connectedness: Why competing firms also adopt identical R&D approaches
This paper explores the endogenous determination of R&D appropriability through the firms' choice of R&D approaches. Whereas identical broad R&D approaches ‘connect’ firms with their R&D environment and maximize absorptive capacities, the opposite holds for idiosyncratic R&D...
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Published in: | International journal of industrial organization 2005-06, Vol.23 (5), p.467-481 |
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Main Author: | |
Format: | Article |
Language: | eng |
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Online Access: | Get full text |
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Summary: | This paper explores the endogenous determination of R&D appropriability through the firms' choice of R&D approaches. Whereas identical broad R&D approaches ‘connect’ firms with their R&D environment and maximize absorptive capacities, the opposite holds for idiosyncratic R&D approaches. Our model shows that competing firms choose identical R&D approaches in order to maximize knowledge flows between each other. In essence, this frees firms from the ‘prisoner's dilemma’ of aggressive investment in R&D. Our analysis contrasts with
Kamien and Zang's (2000) [Kamien, M., Zang, I., 2000. Meet me halfway: research joint ventures and absorptive capacity. International Journal of Industrial Organization 18 995–1012] finding that competing firms chose idiosyncratic R&D approaches. We demonstrate that their model also yields a Nash equilibrium for broad identical R&D approaches. |
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ISSN: | 0167-7187 1873-7986 |