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Organizational Structure and Technological Investment

Ines Macho-Stadler (), Noriaki Matsushima and Ryusuke Shinohara

No 1243, Working Papers from Barcelona School of Economics

Abstract: We analyze firms’ decisions on their vertical organization, taking into account the characteristics of both the final good competition and the R&D process. We consider two vertical chains, where upstream sectors invest in R&D. Such investment determines the production costs of the downstream sector and has spillovers on the production and the investment costs of the rival. In a general setting, we show that the equilibrium organizational structure depends on whether the situation considered belongs to one of four possible cases. We study how final good market competition, R&D spillover, and R&D incentives interact to determine the equilibrium vertical structure.

Keywords: R&D; vertical separation; market structure; spillover (search for similar items in EconPapers)
JEL-codes: C72 L13 L22 O32 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-com and nep-ind
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Journal Article: Organizational Structure and Technological Investment (2021) Downloads
Working Paper: Organizational structure and technological investment (2020) Downloads
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