Information Sharing and Optimum Financing Mode

25 Pages Posted: 7 Jan 2005

See all articles by Gabriella Chiesa

Gabriella Chiesa

University of Bologna - Department of Economics

Abstract

Within a setting where an established firm (incumbent) and a new venture engage in research and development (R&D) and compete in the product market, we analyze R&D cooperation and the optimum financing mode. We show that if an equilibrium is one where firms cooperate, then financing is provided by the incumbent. Cooperation is more likely in organizations where agency problems are less severe, e.g. family firms, and the riskier R&D. If the R&D output is patentable, cooperation is implemented via licensing and the optimum financing mode has financing provided by a pure financial institution.

Suggested Citation

Chiesa, Gabriella, Information Sharing and Optimum Financing Mode. Available at SSRN: https://ssrn.com/abstract=644544

Gabriella Chiesa (Contact Author)

University of Bologna - Department of Economics ( email )

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HOME PAGE: http://www.dse.unibo.it/gchiesa/home.htm

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