Seminarios académicos y conferencias
"Innovation, Credit Constraints and Mergers"
16 octubre 2018 - 17:00
Sala 209, Facultad de Ciencias Económicas y Administrativas UC
Abstract: This paper studies the relationship between innovation, credit constraints and competitive pressure in a static and reduced-form oligopoly model where innovation is dichotomic. We provide a taxonomy in the space of strategic complements/substitutes and positive/negative spillovers regarding the relationship between access to external funds and innovation. We then study the impact that mergers have on innovation. We show that mergers tightens credit constraints, yet innovation may either increase or decrease upon a merger since mergers allow pooling of resources and winner-picking. Despite that merges could stifle innovation, this might be efficient since scarce resources are allocated more efficiently and spillovers are internalized. In light of these results, the empirical evidence regarding the relationship between innovation, mergers and credit constraints is discussed.