We analyze the diffusion and integration of external knowledge by distinguishing between the depth and breadth of technological knowledge in combination with the type of partner and channel of exchange. Using a latent variable structural equation model with a sample of 202 US biotechnology firms between 1990 and 2009, we investigate the extent to which the M&As with different partners contribute to the depth and breadth of the focal firm's knowledge base. Our analysis also addresses potential endogeneity issues and shows that acquisitions of related firms mainly increase the depth of knowledge, while acquisitions of unrelated firms develop the breadth of knowledge.
The present paper deals with the issue of newspaper subsidies in a framework of endogenous quality provision. We compare monopoly and duopoly cases in a vertically differentiated model. For monopolies we show that a per-copy subsidy reduces quality. Conversely, in duopolies in the vertically differentiated model, we show that a state subsidy might increase the quality of the low-quality newspaper and decrease the quality of the high-quality newspaper.
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