Beschreibung:
Many firms often face a shortage of R&D funds and have to raise capital by selling ownership shares to their competitors, which affects the R&D models of competing firms. We utilize a stylized game theoretic model to study the equilibrium R&D strategy and investigate the impacts of cooperative equity financing on cooperative R&D for competing firms from multiple perspectives. We find that, unlike bank financing, the capital-constrained firm′s R&D strategy is associated with its equity share and the competition intensity, while its competitor should always choose cooperative R&D under cooperative equity financing. We also demonstrate that compared with bank financing, although cooperative equity financing can resolve the adverse selection problem, it restrains the capital-constrained firm from sharing R&D achievements with its business rival. Nonetheless, the firm with sufficient capital has more incentives to pursue cooperative R&D under cooperative equity financing. Moreover, as the capital-abundant firm′s equity share and the expected R&D capability climb, the incentive effect of cooperative equity financing on cooperative R&D in equilibrium is weakened. Our results offer useful managerial insights into the underlying drivers of R&D cooperation between business rivals