Working Paper


J. Peter Neary
Dermot Leahy



competition policy industrial policy l13 research joint ventures o31 absorptive capacity of r d r d spillovers research industrial

Absorptive capacity, R&D spillovers, and public policy (2003)

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.
Collections Ireland -> University College Dublin -> Institutes and Centres
Ireland -> University College Dublin -> Geary Institute
Ireland -> University College Dublin -> Geary Institute Working Papers

Full list of authors on original publication

J. Peter Neary, Dermot Leahy

Experts in our system

J. Peter Neary
University College Dublin
Total Publications: 79
Dermot Leahy
Maynooth University
Total Publications: 50