I model an innovation game in which firms can choose to be leaders or followers. Internal finance leads to a stalemate … in which each firm wants to free-ride on the others' experimentation costs. Therefore, no innovation occurs. When instead … firms compete in the capital markets to finance innovation (e.g., in the case of venture capital or IPOs) there is an …

in micro-economic theory on the managerial decisions related to the financing of such innovation. In particular … and unpredictability of the innovation process. Moreover, financing of innovation in large organizations is basically a …Technological innovation, although vital for sustenance of firms against fierce global competition, presents a paradox …

verbunden, und die Frage der Finanzierung ist bereits im Vorfeld der Gründung von großer Bedeutung für den Erfolg. Die … Transaktionskostentheorie. Zur Erklärung der Finanzierung von Innovationen arbeitet er bisher vernachlässigte Arbeiten Schumpeters zur …

We consider the financing of a research projectunder uncertainty about the time of completion and the probability of … eventualsuccess. We distinguish between two financing modes, namely relationshipfinancing, where the allocation decision of the … entrepreneur is observable, andarm's-length financing, where it is unobservable. We find that equilibrium funding stops altogether …