R&D Investments, Information and Strategy

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    Abstract

    This paper argues that firms can best realize the value of their investments in R&D by exploiting the associated information asymmetries. Attention is directed away from the physical results of R&D and towards the firm’s ability, more generally, to earn rents from the private information emanating from its R&D. Four strategies may be used to exploit the information asymmetries from R&D: (1) publish the details of the innovation in return for legal protection; (2) keep the information inside the firm; (3) make the information selectively, informally available to others; and (4) disseminate the information as widely and rapidly as possible. To implement these strategies, resources may be allocated both to the commercial development of new technologies, and/or to related market opportunities (investing in other companies, assets and technologies). This perspective should yield new insights to managers in designing strategies (and counter-strategies) to position themselves not only at the technological edge, but more fundamentally, at the ‘information edge’.
    Original languageEnglish
    Place of PublicationCopenhagen
    PublisherDepartment of International Economics and Management, Copenhagen Business School
    Number of pages29
    Publication statusPublished - 1999
    SeriesWorking Paper / Department of International Economics and Management, Copenhagen Business School
    Number10-1999

    Keywords

    • R&D investments
    • Information
    • Strategy
    • Asymmetric information
    • International R&D management

    Cite this

    Davis, L. N. (1999). R&D Investments, Information and Strategy. Department of International Economics and Management, Copenhagen Business School. Working Paper / Department of International Economics and Management, Copenhagen Business School, No. 10-1999