Economics

Anna Hammerschmidt

Absorptive Capacity

Volume 165 () / Issue 3, pp. 418-437 (20)

20,00 € including VAT
article PDF
I investigate how the introduction of the absorptive-capacity hypothesis changes the results of strategic investment games with exogenous spillover. As a novelty, this paper distinguishes between two different components of R&D: absorptive R&D and inventive R&D. It is demonstrated that a new effect appears: The absorptive-capacity effect now counteracts the free-rider effect of the traditional models. The findings show that firms will invest more in R&D to strengthen absorptive capacity when the spillover parameter is higher. To learn from its competitor, a firm needs to develop its absorptive capacity: no pain, no gain.
Authors/Editors

Anna Hammerschmidt No current data available.