Complementary Assets, Start-Ups and Incentives to Innovate

Colombo L, Dawid H (2013) Working Papers in Economics and Management; 07-2013.
Bielefeld: Bielefeld University, Department of Business Administration and Economics.

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In this paper we examine to what extent market conditions facilitating start-up formation affect technical change and firms' profits. We consider a model in which R&D efforts of an incumbent firm generate partly tacit technological know-how embodied in a key R&D employee, who might use it to form a start-up. The availability of complementary assets influences whether new firms are created and determine expected profits for start-up-founders. A large availability of complementary assets has the direct effect that the generation of start-ups is fostered. However, as a strategic effect, the incentives of incumbent firms to invest in R&D might be reduced because of the increased danger of knowledge loss occurring through start-up formation. We fully characterize the effects of an increase in the availability of complementary assets, showing under which conditions the effects on innovative activities and industry profits are negative.
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Colombo L, Dawid H. Complementary Assets, Start-Ups and Incentives to Innovate. Working Papers in Economics and Management. Vol 07-2013. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2013.
Colombo, L., & Dawid, H. (2013). Complementary Assets, Start-Ups and Incentives to Innovate (Working Papers in Economics and Management, 07-2013). Bielefeld: Bielefeld University, Department of Business Administration and Economics. doi:10.4119/unibi/1861142
Colombo, L., and Dawid, H. (2013). Complementary Assets, Start-Ups and Incentives to Innovate. Working Papers in Economics and Management, 07-2013, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Colombo, L., & Dawid, H., 2013. Complementary Assets, Start-Ups and Incentives to Innovate, Working Papers in Economics and Management, no.07-2013, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
L. Colombo and H. Dawid, Complementary Assets, Start-Ups and Incentives to Innovate, Working Papers in Economics and Management, vol. 07-2013, Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2013.
Colombo, L., Dawid, H.: Complementary Assets, Start-Ups and Incentives to Innovate. Working Papers in Economics and Management, 07-2013. Bielefeld University, Department of Business Administration and Economics, Bielefeld (2013).
Colombo, Luca, and Dawid, Herbert. Complementary Assets, Start-Ups and Incentives to Innovate. Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2013. Working Papers in Economics and Management. 07-2013.
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