Organizational structure and technological investment
Ines Macho-Stadler (),
Noriaki Matsushima and
ISER Discussion Paper from Institute of Social and Economic Research, Osaka University
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.
Date: 2019-11, Revised 2020-12
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Journal Article: Organizational Structure and Technological Investment (2021)
Working Paper: Organizational Structure and Technological Investment (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1069rr
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