Endogenous protection of R and D investmentsReport as inadecuate




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Issued date: 2006-11

ISSN: 2340-5031

Serie-No.: UC3M Working Paper. Economics2006-25

Rights: Atribución-NoComercial-SinDerivadas 3.0 España

Abstract:We examine firms incentives to protect their non-cooperative R and D investments from spilling over to competitors. Contrary to most of the existing literature, we show that the lack of full appropriability can lead to an increase in R and D investments. We aWe examine firms incentives to protect their non-cooperative R and D investments from spilling over to competitors. Contrary to most of the existing literature, we show that the lack of full appropriability can lead to an increase in R and D investments. We also show that even if protection is costless, firms sometimes choose to let their R and D investments unprotected. Our welfare analysis indicates that public policies that promote the dissemination of technological knowledge should be adopted.+-





Author: Milliou, Chrysovalantou

Source: http://e-archivo.uc3m.es


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Universidad Carlos III de Madrid Repositorio institucional e-Archivo http:--e-archivo.uc3m.es Departamento de Economía DE - Working Papers.
Economics.
WE 2006-11 Endogenous protection of R and D investments Milliou, Chrysovalantou http:--hdl.handle.net-10016-482 Descargado de e-Archivo, repositorio institucional de la Universidad Carlos III de Madrid Working Paper 06-63 Economics Series 25 November 2006 Departamento de Economía Universidad Carlos III de Madrid Calle Madrid, 126 28903 Getafe (Spain) Fax (34) 91 624 98 75 ENDOGENOUS PROTECTION OF R and D INVESTMENTS * Chrysovalantou Milliou 1 Abstract We examine firms incentives to protect their non-cooperative R and D investments from spilling over to competitors.
Contrary to most of the existing literature, we show that the lack of full appropriability can lead to an increase in R and D investments.
We also show that even if protection is costless, firms sometimes choose to let their R and D investments unprotected.
Our welfare analysis indicates that public policies that promote the dissemination of technological knowledge should be adopted. Keywords: R and D investments; Spillovers; Protection 1 Department of Economics, Universidad Carlos III de Madrid, Getafe (Madrid) 28903, Spain, e-mail: cmilliou@eco.uc3m.es. * I am grateful to Jos Jansen, Emmanuel Petrakis, and Carlos Ponce for useful comments and suggestions. Financial support by the Ministerio de Educacion y Ciencia under project SEJ2004-00670 is gratefully acknowledged.
Full responsibility for all shortcomings is mine. 1 Introduction A firm’s technological achievements are typically not confined within the firm’s own boundaries.1 Instead, they often leak out to competitors through a number of channels such as informal talks among employees, mobility of workers, customers, and reverse engineering.
According to most of the industrial organization literature on R and D investments, the presence of spillovers, and thus, the lack of full appropriability, dampens...





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