Meet me halfway but don’t rush: absorptive capacity and strategic R&D investment revisited

Demonstration or congestion? Export spillovers in Sweden

“…Here we follow Grünfeld (2003) and include in the regression interaction terms between domestic firm characteristics and foreign presence. The interaction variables intended to capture absorptive capacity are calculated as the product of the presence variables and the R&D intensity (labelled absorptive capacity) of the domestic firm.…”

“…We use the industry and region effects to control for a wide range of time-invariant omitted industry and regional factors, such as infrastructure and local labour markets, that might explain possible correlations of firm export decisions with our foreign presence variables. 19 The time effects are used to control for shocks common to all firms, such as exchange rate movements at the accession 15 As around two thirds of firms report no R&D, we follow Grünfeld (2003) and set these values to zero. 16 We also follow standard practice in using lagged foreign presence measures.…”

“…Are some firms better placed to capture the spillover benefits of foreign-owned firms? Absorptive capacity effects have previously been explored in the productivity spillovers literature by Cohen and Levinthal (1989); Grünfeld (2003); Girma and Wakelin (2002);Haskel et al (2002); Kokko et al (1996). However, to the best of our knowledge there is no previous study on the effects of sender capacity.…”

Absorptive capacity, R&D spillovers, and public policy

“…4 In Section 2 we specify a general model of the absorptive capacity process and explore its implications for the incentives to engage in R&D and for the effective level of spillovers. We also show how our model relates to some special cases which have been considered by Cohen and Levinthal (1989), Kamien and Zang (2000), Martin (2002) and Grunfeld (2003). Section 3 turns from the firm to the market to consider how absorptive capacity alters R&D incentives and welfare with and without cooperation by firms.…”

“…Kamien and Zang (2000) and Grunfeld (2003) consider this issue assuming that investment both reduces costs directly and contributes to absorptive capacity. Martin (2002) covers similar ground in a tournament model of R&D, where the winner of the innovation race licenses the new technology to the loser.…”