No abstract

This paper studies, in a two‐period model, the effects of knowledge spillovers among product market competitors on R&D levels. It argues that when firms' R&D decisions are strategic complements, in industries in which spillovers increase the marginal productivity of a firm's R&D, both incoming and outgoing spillovers spur R&D in equilibrium. Outgoing spillovers can foster innovation even in a homogeneous‐product industry. In these industries, the intellectual property law should be such that facilitates knowledge diffusion. If firms have power in deciding the level of knowledge spillovers, we show that a firm will choose to disclose its knowledge to its product market competitors.

Using microdata of firm exports and international patent activity, we find that Greek innovative exporters, identified by their patent filing activity, have substantially higher export revenues by selling higher quantities rather than charging higher prices. To account for this evidence, we set up a horizontally differentiated product model in which an innovative exporter competes for market share in a destination against many non‐innovative rivals. We argue that as the competition among the exporters of the non‐innovative product becomes more intense, the innovative firm exports more compared with its non‐innovative rivals in more distant markets, a prediction that is empirically confirmed in the dataset for Greek innovative exporters. Résumé Innovation, brevets et commerce : analyse au niveau de l’entreprise. À l’aide de microdonnées d’entreprises relatives aux exportations et aux activités de brevetage international, nous montrons que les exportateurs grecs innovants, identifiés par leurs dépôts de brevets, réalisent des gains à l’exportation nettement supérieurs en misant davantage sur les volumes de vente que sur l’augmentation des prix. Pour expliquer cette situation, nous avons élaboré un modèle de différenciation horizontale de produits dans lequel les exportateurs novateurs sont en compétition avec de nombreux concurrents non innovants afin de gagner des parts de marché. Nous montrons qu’à mesure que la compétition s’intensifie entre les exportateurs de produits non innovants, l’entreprise innovante exporte davantage que ses concurrents vers les marchés plus éloignés ; cette prédiction se vérifie de fac¸on empirique grâce aux données relatives aux exportateurs grecs innovants.

No abstract

This paper studies the endogenous timing of moves in a game with competition in basic research between a university and a commercial firm. It examines the conditions under which the two entities end up investing in innovation at equilibrium, both under simultaneous and sequential moves. It argues that when the innovation process is not too costly, under any timing, the firm conducts research despite the opportunities for complete free‐riding. The two sequential move games with either player as leader emerge as equilibrium endogenous timings, with both entities realizing higher profits in either outcome than in a simultaneous move game. Each entity also profits more by following than by leading. Finally, as a proxy for a welfare analysis, we compare the propensities for innovation across the three scenarios and find that university leadership yields a superior performance. This may be used as a selection criterion to choose the latter scenario as the unique outcome of endogenous timing.