Title: Allocation of Ownership Rights and Cooperative R&D Investment:An Experimental Investigation
Abstract:Innovation is a source of business transformation and an approach to achieving competitive advantage.However,the rapid technological advancement and the rapidly changing consumer demand are making it ...Innovation is a source of business transformation and an approach to achieving competitive advantage.However,the rapid technological advancement and the rapidly changing consumer demand are making it difficult for companies to achieve the full advantage of resources and technology.Hence,seeking cooperation with research institutions,universities,and companies to complement with each other's strength is a widely used technology innovation strategy.Opportunistic behaviors for the pursuit of unilateral interests in collaborative research and development( RD) can seriously affect the collaborative innovation efficiency.It is important to encourage cooperation and innovation through ownership allocation.This issue has been discussed considerably by economists and practitioners.Joint ownership is considered the main configuration.Two conflicting viewpoints dominate the discussion of the current literature.One view is that equal or approximately equal allocation of ownership makes the private benefits of control no longer exist.The other view is that peer to peer ownership provides the least efficient incentive.In addition,the current theoretical models point out the importance of the dynamic allocation of ownership,but lack of empirical examination.The design of a reasonable contract including ownership allocation is an important part of the cooperative RD.Besides,promoting cooperative RD efficiency is one of key issues faced by Chinese innovation.This study constructs a basic two-phase cooperative R D framework and analyzes the impact of ownership allocation on partners' inputs over two stages,and the advantage of dynamic allocation of ownership in incentives using experimental research method.The results show that partners' inputs are positively related to ownership.Dynamic allocation of ownership under convertible bonds contract has higher incentives on the partners than the contract with fixed ownership rights.In addition,the inputs at development stage are positively related to the inputs at research stage under the contract of fixed allocation of ownership.Under the contract of convertible bond,the impact of partner's investment at research stage on self-investment at development stage is weakened.With increasing input level of research institutions,enterprises would implement the conversion option under the contract of convertible bond.Read More
Publication Year: 2014
Publication Date: 2014-01-01
Language: en
Type: article
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