On Vertical Integration into R&D

The Quarterly Review of Economics and Finance, 32(3) Autumn 1992: 54-59

Posted: 26 Sep 2014 Last revised: 27 Sep 2014

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

Date Written: September 24, 2014

Abstract

Using a general probability distribution of innovation, this article analyzes a firm's incentives to integrate vertically into research. We find that, with one-shot innovation, investment in R&D increases with rewards from innovation and decreases with competition. However, under certain conditions these plausible results are reversed. Specifically, if innovation is sufficiently delayed, higher innovation profits might even lead to lower R&D investment. Also, if the firm has a sufficiently large initial R&D investment, it might increase its R&D investment in the face of greater rival R&D.

Suggested Citation

Goel, Rajeev K., On Vertical Integration into R&D (September 24, 2014). The Quarterly Review of Economics and Finance, 32(3) Autumn 1992: 54-59. Available at SSRN: https://ssrn.com/abstract=2500932

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
209
PlumX Metrics