Absorptive capacity, R&D spillovers, and public policy

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Title: Absorptive capacity, R&D spillovers, and public policy
Authors: Leahy, DermotNeary, J. Peter
Permanent link: http://hdl.handle.net/10197/1886
Date: 20-Oct-2003
Online since: 2010-02-25T15:13:21Z
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.
Type of material: Working Paper
Publisher: University College Dublin. Institute for the Study of Social Change (Geary Institute)
Series/Report no.: ISSC Discussion Paper Series; WP2003/16
Keywords: Absorptive capacity of R&DCompetition policyIndustrial policyR&D spilloversResearch joint ventures
metadata.dc.subject.classification: O31; L13
Subject LCSH: Research, Industrial
Industrial policy
Other versions: http://www.ucd.ie/geary/publications/2003/wp16.pdf
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Geary Institute Working Papers

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