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http://hdl.handle.net/10197/1886
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| Title: | Absorptive capacity, R&D spillovers, and public policy |
| Author: | Leahy, Dermot
Neary, J. Peter |
| Date: | 20-Oct-2003 |
| Publisher: | University College Dublin. Institute for the Study of Social Change (Geary Institute) |
| Series or research strand: | ISSC Discussion Paper Series
WP2003/16 |
| Type of material: | Working Paper |
| 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. |
| Web link to reference this item: | http://hdl.handle.net/10197/1886 |
| Keywords: | Absorptive capacity of R&D; Competition policy; Industrial policy; R&D spillovers; Research joint ventures; |
| NEREUS JEL code: | O31; L13; |
| Subject Heading: | Research, Industrial; Industrial policy; Competition; |
| Other web versions: | Publisher's version |
| Status of Item: | Not peer reviewed |
| Availability: | Full text available |
| Appears in Collections: | Economists Online Collection & RePEc
Geary Institute Working Papers
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