THE ORGANIZATION OF THE INNOVATION INDUSTRY: ENTREPRENEURS, VENTURE CAPITALISTS, AND OLIGOPOLISTS

• 成果类型: Article
• 署名作者: Norback, Pehr-Johan; Persson, Lars
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1162/JEEA.2009.7.6.1261
• 发表日期: 2009
• 页码: 1261-1290
• 关键词: start-up firms; convertible securities; product market; TECHNOLOGY; PROPERTY; monopoly; auctions

摘要

We construct a model where incumbents can either acquire basic innovations from entrepreneurs, or wait and acquire developed innovations from entrepreneurial firms supported by venture capitalists. We show that venture-backed entrepreneurial firms have an incentive to overinvest in development vis vis incumbents due to strategic product market effects on the sales price of a developed innovation. This will trigger preemptive acquisitions by incumbents, thus increasing the reward for entrepreneurial innovations. We also show that venture capital can emerge in equilibrium if venture capitalists have cost advantages, or if development is associated with double moral hazard problems. (JEL: G24, L1, L2, M13, O3)