Damiano Bruno Silipo

Incentives and Forms of Cooperation in Research and Development

The paper examines the main factors that affect the incentive to cooperate in R&D, inquiring into the effects of cooperation on incentives to innovate in both a complete and an incomplete contract framework. It considers several forms of cooperative agreements and studies the circumstances that make one type of cooperation, more likely than others, to emerge. Theoretical considerations suggest that two of the main factors are uncertainty and spillovers. Further, the incentive to cooperate may be greater or less among symmetric than among asymmetric firms, depending on the source of the asymmetry. When firms cooperate, in most cases they prefer a research joint venture, but because of transaction costs, moral hazard and adverse selection problems other forms of cooperation in R&D may occur. Uncertainty and spillovers also affect the size and the nature of coalitions, and in some circumstances competing research joint ventures may be formed. Finally, the paper surveys the empirical evidence and discusses its consistency with the theoretical conclusions.

The Banks and the Italian Economy

Credit Rationing in Italy.- Does Local Financial Development Matter?.- Local Financial Development and Corporate Financial Policy.- The Geography of Banking Power: The Role of Functional Distance.- Bank Mergers and Credit Allocation Among Italian Regions.- Basel II and the Financing of R&D Investments.- Basel II and Banking Behaviour in a Dualistic Economy.- Measuring the Efficiency of the Banking System in a Dualistic Economy: Evidence from the Italian Case.- Consolidation, Ownership Structure and Efficiency in the Italian Banking System.

Firms' R&D decisions under incomplete information

Abstract The paper considers a patent race in which firms do not know their relative positions. In this setting, firms that start in the same position proceed at the highest possible speed; and if one firm has an initial advantage it preempts the rival, but at the cost of dissipating a significant part of its monopoly rent. So the paper shows that incomplete information in a patent race leads to rent dissipation. The latter is higher, the higher the value of the prize and the lower the cost of R&D. Thus, for innovations that provide relatively high profits the time to discovery is shortened, but the social losses are likely to be high, due to duplication of effort.

Credit Rationing in Italy

This work presents new evidence on the determinants of credit rationing, seeking to discriminate between different theories by nesting them within a general empirical model. We consider determinants related to the demand for loans, the supply side, and institutional and environmental aspects affecting borrowers’ and banks’ behaviour in local credit markets. Another generalization of our approach is to consider both consumer and business credit constraints. Using direct measures of credit rationing provided by surveys carried out by the Bank of Italy and by Capitalia for the period 1995–2003, we estimate the impact of the main determinants of credit rationing in the Italian local credit markets. Our chief finding is that most of the regressors capturing the determinants from the demand side are significant and with the expected sign. By contrast, supply side determinants and local market conditions are not significant, save for the measure of banking competition and branch density.

Inventive Activity and Risk Aversion

There is a large amount of evidence showing that the discovery of a new good or a new technique is the result of luck as well as of the rational pursuing of a specific aim (see Jewkes et al., 1969, p. 356). Sometimes the pursuing of a specific aim leads to findings in different fields as a by-product of the R & D activity (Nelson, 1959). Indeed the very essence of R & D activity is the uncertainty about the nature of discovery and the amount of expenditure necessary to achieve the discovery.