Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Complementarities and coopetition in presence of intangible resources Industrial economic and regulatory implications

Complementarities and coopetition in presence of intangible resources Industrial economic and... Purpose – The purpose of this paper is to develop a model of innovative industries which face coopetition: firms compete while committing at the same time to R&D joint ventures and other cooperative agreements. These joint activities are likely to occur in presence of complementarities on demand or supply sides; they raise specific accounting issues concerned with recognition and measurement of intangible resources committed to, and generated from them. Design/methodology/approach – The paper develops a heuristic industrial economic model characterized by joint utility of outputs for custumers on the demand side, and potential complementarities in R&D activities on the supply side. The authors’ model describes different scenarios generated by alternative corporate pricing strategies. In particular, these strategies (as implemented by firms or imposed by regulators) influence both infrastructure corporate investments and the creation and stability of coopetitive relationships. Findings – The model scenarios show that especially accounting for intangible resources – related to processes of innovation and R&D – should deserve specific attention. Firms and regulators need to properly account for both hard intangibles that have market prices of reference, and soft and ethereal intangibles that factually have not. A stock method of accounting for intangibles results then which is narrow and biased, because of its focus on hard intangibles alone. A flow method of accounting should be preferred, which tracks the cumulated investment flow of direct and indirect expenditures in innovation and development, properly allocated within and between firms. Originality/value – The paper argues for regulatory frameworks that enable increasing the positive effects of cooperation while repressing collusive behaviours (technological standardization, fiscal incentives to welfare‐improving innovation and strategy, public research, costumers’ protection, and so forth). Concerning the overall industrial organization, the paper's theoretical analysis shows the need for better recognition and measurement of intangibles and complementarities in costing and pricing, for both corporate and regulatory purposes. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Strategy and Management Emerald Publishing

Complementarities and coopetition in presence of intangible resources Industrial economic and regulatory implications

Download PDF
13 pages

Loading next page...
 
/lp/emerald-publishing/complementarities-and-coopetition-in-presence-of-intangible-resources-BJxUUYJruh
Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
1755-425X
DOI
10.1108/17554251211276399
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to develop a model of innovative industries which face coopetition: firms compete while committing at the same time to R&D joint ventures and other cooperative agreements. These joint activities are likely to occur in presence of complementarities on demand or supply sides; they raise specific accounting issues concerned with recognition and measurement of intangible resources committed to, and generated from them. Design/methodology/approach – The paper develops a heuristic industrial economic model characterized by joint utility of outputs for custumers on the demand side, and potential complementarities in R&D activities on the supply side. The authors’ model describes different scenarios generated by alternative corporate pricing strategies. In particular, these strategies (as implemented by firms or imposed by regulators) influence both infrastructure corporate investments and the creation and stability of coopetitive relationships. Findings – The model scenarios show that especially accounting for intangible resources – related to processes of innovation and R&D – should deserve specific attention. Firms and regulators need to properly account for both hard intangibles that have market prices of reference, and soft and ethereal intangibles that factually have not. A stock method of accounting for intangibles results then which is narrow and biased, because of its focus on hard intangibles alone. A flow method of accounting should be preferred, which tracks the cumulated investment flow of direct and indirect expenditures in innovation and development, properly allocated within and between firms. Originality/value – The paper argues for regulatory frameworks that enable increasing the positive effects of cooperation while repressing collusive behaviours (technological standardization, fiscal incentives to welfare‐improving innovation and strategy, public research, costumers’ protection, and so forth). Concerning the overall industrial organization, the paper's theoretical analysis shows the need for better recognition and measurement of intangibles and complementarities in costing and pricing, for both corporate and regulatory purposes.

Journal

Journal of Strategy and Management – Emerald Publishing

Published: Oct 26, 2012

Keywords: Innovation; Research and development; Innovation policy; Complementarities; Coopetition; Intangibles; Accounting; Regulated industries; Tariff and pricing; Measurement of production costs

References

  • Economic welfare and the allocation of resources for invention
    Arrow, K.J.
  • Following the Money. The Enron Failure and the State of Corporate Disclosure, American Enterprise Institute and Brookings Institution Joint Center for Regulatory Studies
    Benston, G.; Bromwich, M.; Litan, E.R.; Wagenhofer, A.
  • The governance of intangibles: rethinking financial reporting and the board of directors
    Biondi, Y.; Reberioux, A.
  • The Firm as an Entity: Implications for Accounting, Economics, and Law
    Biondi, Y.; Canziani, A.; Kirat, T.
  • Co‐Opetition: A Revolution Mindset that Combines Competition and Cooperation. The Game Theory Strategy That's Changing the Game of Business
    Brandenburger, A.M.; Nalebuff, B.J.
  • Alliances, rivalry, and firm performance in enterprise system software markets: a social network approach
    Chellappa, R.; Saraf, N.
  • Intellectual capital: definitions, categorization and reporting models
    Choong, K.K.
  • A model of duopoly suggesting a theory of entry barriers
    Dixit, A.
  • Information technology in supply chains: the value of IT‐enabled resources under competition
    Dong, S.; Xin Xu, S.; Zhu, K.X.
  • The Economics of Knowledge
    Foray, D.
  • An analysis of incentives for network infrastructure investment under different pricing strategies
    Gupta, A.; Jukic, B.; Stahl, D.O.; Whinston, A.
  • Intangibles: a synthesis of current research
    Kaufmann, L.; Schneider, Y.
  • A survey on intangible capital
    Kim, Y.
  • Information technology and intangible output: the impact of IT investment on innovation productivity
    Kleis, L.; Chwelos, P.; Ramirez, R.; Cockburn, I.
  • Competition in Telecommunications
    Laffont, J.‐J.; Tirole, J.
  • Strategic and welfare implications of bundling
    Martin, S.
  • Dynamique des stratégies de coopétition dans le secteur des TIC: le cas des ERP
    Pellegrin‐Boucher, E.; Le Roy, F.
  • Product diffrentiation and welfare
    Spence, A.M.
  • Visualising Intangibles: Measuring and Reporting in the Knowledge Economy
    Zambon, S.; Marzo, G.