Organizational structure and technological investment

Arbeitspapier

We analyze firms' decisions to adopt a vertical integrated or decentralized structure taking into account the characteristics of both the final good competition and the R&D process. We consider two vertical chains, where R&D is conducted by upstream sectors. R&D investment determines the production costs of the downstream sector and has spillovers on the rivals' costs. In a general setup, we show that equilibrium organizational structure depends on whether the situation considered belongs to one of four possible cases and we study how final good market competition, spillover, and incentives in innovation interact to determine the optimal vertical structure.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 1069

Classification and Topics

• Classification: Wirtschaft ; Firm Organization and Market Structure ; Oligopoly and Other Imperfect Markets ; Management of Technological Innovation and R&D ; Noncooperative Games
• Subject: R&D ; Vertical separation ; Market structure ; Spillover ; R&D ; Vertical separation ; Market structure ; Spillover

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Macho-Stadler, Inés ; Matsushima, Noriaki ; Shinohara, Ryusuke
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/230475
• Last update: 10.03.2025, 11:43 AM CET