Spillovers and Absorptive Capacity in a Patent Race

15 Pages Posted: 3 Apr 2006

See all articles by Christine Halmenschlager

Christine Halmenschlager

University of Paris II Pantheon-Assas - ERMES

Abstract

This paper explores the impacts of absorptive capacity on the behavior of innovating firms competing in a dynamic patent race. We introduce spillovers and absorptive capacities in the Fudenberg, Gilbert, Stiglitz and Tirole patent race with memory. First, we show that incorporating absorptive capacity has different effects according as the firm leads or follows in the race. While the leader is getting soft, the follower revives, allowing him to possibly catch up with the leader. Second, we find that spillovers with absorptive capacities tend to increase the pace of innovation, a somewhat paradoxical outcome.

Suggested Citation

Halmenschlager, Christine, Spillovers and Absorptive Capacity in a Patent Race. Manchester School, Vol. 74, No. 1, pp. 85-102, January 2006. Available at SSRN: https://ssrn.com/abstract=873923 or http://dx.doi.org/10.1111/j.1467-9957.2006.00484.x

Christine Halmenschlager (Contact Author)

University of Paris II Pantheon-Assas - ERMES ( email )

12 Place du Panthéon
Paris, Cedex 5, 75005
France

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