This paper deals with an oligopolistic industry where firms are engaged in cost-reducing R&D activity to maximize their market shares. The existence and uniqueness of a feedback-Nash-optimal R&D strategy for each firm are discussed. Our simulations highlight that variations in spillovers hardly influence the firms' R&D investment, if their absorptive capacities to exploit extramural knowledge depend on their R&D efforts. Moreover, extramural knowledge cannot completely replace in-house R&D. However, a high level of public R&D favors the firm with the most restrictive R&D expenditure constraint and/or with the lowest initial R&D stock, provided it invests in R&D.
Campisi, D., Mancuso, P., Nastasi, A. (2001). R&D Competition, Absorptive Capacity, and Market Shares. JOURNAL OF ECONOMICS, 73(1), 57-80.
R&D Competition, Absorptive Capacity, and Market Shares
CAMPISI, DOMENICO;MANCUSO, PAOLO;
2001-01-01
Abstract
This paper deals with an oligopolistic industry where firms are engaged in cost-reducing R&D activity to maximize their market shares. The existence and uniqueness of a feedback-Nash-optimal R&D strategy for each firm are discussed. Our simulations highlight that variations in spillovers hardly influence the firms' R&D investment, if their absorptive capacities to exploit extramural knowledge depend on their R&D efforts. Moreover, extramural knowledge cannot completely replace in-house R&D. However, a high level of public R&D favors the firm with the most restrictive R&D expenditure constraint and/or with the lowest initial R&D stock, provided it invests in R&D.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
