Absorptive capacity, R&D spillovers, and public policy
|Title:||Absorptive capacity, R&D spillovers, and public policy||Authors:||Leahy, Dermot; Neary, J. Peter||Permanent link:||http://hdl.handle.net/10197/1312||Date:||May-2004||Online since:||2009-07-27T16:10:18Z||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.||Funding Details:||Economic and Social Research Council (ESRC)||Type of material:||Working Paper||Publisher:||University College Dublin. School of Economics||Series/Report no.:||UCD Centre for Economic Research Working Paper Series; WP04/18||Keywords:||Absorptive capacity of R&D; R&D spillovers; Competition policy; Industrial policy; Research joint ventures||metadata.dc.subject.classification:||O31; L13||Subject LCSH:||Absorptive capacity (Economics)
Research and development projects
|Other versions:||http://www.ucd.ie/economics/research/papers/2004/WP04.18.pdf||Language:||en||Status of Item:||Not peer reviewed|
|Appears in Collections:||Economics Working Papers & Policy Papers|
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