TY  - JOUR
AB  - We examine to what extent market conditions facilitating
start-up formation affect firms' R&D investment and profits. We consider a model in which R&D efforts of an incumbent firm generate partly tacit technological know-how embodied in a key R&D employee, who might use it to form a start-up. The availability of complementary assets influences whether new firms are created and determine expected profits for start-up's founders.
A large availability of complementary assets has the direct effect that the generation of start-ups is fostered. However, as a strategic effect, the incentives of incumbents to invest in R&D may be reduced because of the increased danger of knowledge loss occurring through start-up formation. We fully characterize the effects of an increase in the availability of complementary assets, showing that counter-intuitively there are cases in which it induces an increase in incumbents' R&D investment.
DA  - 2016
DO  - 10.1016/j.ijindorg.2015.11.003
KW  - innovation economics
KW  - etace_innovation_economics
LA  - eng
M2  - 177
PY  - 2016
SN  - 0167-7187
SP  - 177-190
T2  - International Journal of Industrial Organization
TI  - Complementary Assets, Start-Ups and Incentives to Innovate
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-26243516
Y2  - 2024-11-22T05:16:29
ER  -