Research joint ventures: The role of financial constraints

Philipp Brunner, Igor Letina and Armin Schmutzler

European Economic Review, 2024, vol. 165, issue C

Abstract: 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.

Keywords: Innovation; Research joint ventures; Financial constraints; Mergers; Intensity of competition; Licensing (search for similar items in EconPapers)
JEL-codes: L13 L24 O31 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Research Joint Ventures: The Role of Financial Constraints (2024)
Working Paper: Research joint ventures: the role of financial constraints (2023)
Working Paper: Research Joint Ventures: The Role of Financial Constraints (2022)
Working Paper: Research Joint Ventures: The Role of Financial Constraints (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:165:y:2024:i:c:s0014292124000710

DOI: 10.1016/j.euroecorev.2024.104742

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