Repeated Innovations and Excessive Spin-Offs

Pierre Mella-Barral and Hamid Sabourian

Janeway Institute Working Papers from Faculty of Economics, University of Cambridge

Abstract: Firms can voluntarily create independent firms to implement their technologically distant innovations and capture their value through capital markets. We argue that when firms repeatedly compete to make innovations, there is inefficient external implementation of innovations and “excessive†creation of such firms. This inefficiency is most exacerbated in the early stages of an industry, when the number of firms is still limited.

Keywords: Repeated Innovations; Spin-Offs; Voluntary Firm Creation (search for similar items in EconPapers)
JEL-codes: M13 O31 O33 (search for similar items in EconPapers)
Date: 2023-06-30
New Economics Papers: this item is included in nep-bec, nep-com, nep-ent, nep-gth, nep-ino, nep-mic and nep-sbm
Note: pm10007, hs102
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camjip:2312

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