Research Joint Ventures: The Role of Financial Constraints

Brunner, Philipp; Letina, Igor; Schmutzler, Armin (2022). Research Joint Ventures: The Role of Financial Constraints

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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 and external financing conditions are bad. An RJV may increase the innovation probability and nevertheless lower total R&D costs. RJVs that increase innovation tend to be profitable, but innovation-reducing RJVs also exist. Finally, we compare RJVs to innovation-enhancing mergers.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Brunner, Philipp Ingo, Letina, Igor

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Language:

English

Submitter:

Julia Alexandra Schlosser

Date Deposited:

24 Oct 2022 15:14

Last Modified:

05 Dec 2022 16:26

ArXiv ID:

2207.04856v1

BORIS DOI:

10.48350/173963

URI:

https://boris.unibe.ch/id/eprint/173963

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