We develop a theory of innovation for entry and sale into oligopoly, and show that an invention of higher quality is more likely to be sold (or licensed) to an incumbent due to strategic product market effects on the sales price. Preemptive acquisitions by incumbents are shown to stimulate the...

<a href="http://www.youtube.com/user/worldscientific#p/u/0/motNYu4eTFw">Video</a> ¡ª Prof. Eugene Fitzgerald talks about the process of innovation and introduces <i>Inside Real Innovation</i>. <i>Read more about the authors' interview/article with <a href="http://www.inc.com/magazine/20101201/mit-eugene-fitzgerald-understanding-innovation.html#">Inc.</a> and <a href="http://blogs.forbes.com/ciocentral/2011/01/31/why-the-government-needs-to-invest-in-innovation/">Forbes.</a></i> This breakthrough book gives a ground-floor view of the innovation process, showing how fundamental innovators...

What explains the world-wide trend of pro-entrepreneurial policies? We study entrepreneurial policy in a lobbying model taking into account the conflict of interest between entrepreneurs and incumbents. It is shown that international market integration leads to more pro-entrepreneurial policies....

R&D incentives of new entrants to a market may be shaped by the prospects of being acquired by an incumbent. In this paper, we analyze a two-stage innovation game between one incumbent and a large number of entrants. In the first stage, firms compete to develop innovations of high quality. They...

Innovative new ventures fail if they cannot attract resources needed to commercialise new ideas and inventions. Obtaining external resources is a central issue for nascent entrepreneurs - people who are in the process of starting new ventures. We argue in this paper that, a way to deal with this...

Since the 1990s, Japanese firms have sought to expand their capacity for innovation by incorporating Western management practices into their organizational culture. This combination of Japanese and Western management practices has been highly successful — Japanese firms are presently at...

Whether diversity or specialization of economic activity better promotes technological change and subsequent economic growth has been the subject of a heated debate in the economics literature. The purpose of this paper is to consider the effect of the composition of economic activity on...

The decision of how best to appropriate the value of new economic knowledge is reached by individuals within the context of the decision-making process embedded in the principal-agent model and applied to organizations. Because new economic knowledge is not only imperfect but also inherently...

This paper develops a model to analyse the implications of firing costs on incentives for R&D and international specialization. The key idea is that, to avoid paying firing costs, the country with a rigid labour market will tend to produce relatively secure goods, at late stages in their product...

We examine a model of R&D competition and cooperation in the presence of spillovers. Unlike virtually all the literature, however, we treat these spillovers as endogenous and under the control of firms. We show that it is then essential to make a number of distinctions that are ignored in the...