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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title Research joint ventures: the role of financial constraints
Organization Unit
  • Philipp Brunner
  • Igor Letina
  • Armin Schmutzler
Item Subtype Original Work
Refereed Yes
Status Published in final form
  • English
Journal Title European Economic Review
Publisher Elsevier
Geographical Reach international
ISSN 0014-2921
Volume 165
Page Range 104742
Date 2024
Abstract Text This paper provides a novel theory of research joint ventures for financially constrained firms. When firms choose R&D portfolios, an RJV can help to coordinate research efforts, reducing investments in duplicate projects. This can free up resources, increase the variety of pursued projects and thereby increase the probability of discovering the innovation. RJVs improve innovation outcomes when market competition is weak or external financing conditions are bad. An RJV may increase the innovation probability and nevertheless lower total R&D costs. RJVs that increase innovation also increase consumer surplus and tend to be profitable, but innovation-reducing RJVs also exist. Finally, we compare RJVs to innovation-enhancing mergers.
Related URLs
Digital Object Identifier 10.1016/j.euroecorev.2024.104742
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Keywords Innovation, research joint ventures, financial constraints, mergers, intensity of competition, licensing