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Making Waves: To Innovate or Be a Fast Second?
| Content Provider | Scilit |
|---|---|
| Author | Yung, Chris |
| Copyright Year | 2016 |
| Description | Internal finance leads to a stalemate in innovation games; each firm wants to free-ride on the others’ costly experimentation. When instead innovation is financed externally (e.g., with venture capital or initial public offerings), there is an endogenous cost to delay. Waiting to make risky irreversible investment conveys pessimistic information. I characterize the relative sizes of waves of leaders and followers in innovation cycles, and the endogenous, intertemporal distribution of quality as each wave builds and crashes. Finally, old waves leave an adverse selection “hangover,” such that too much early innovation can cause the market for future innovation to break down. |
| Related Links | https://www.cambridge.org/core/services/aop-cambridge-core/content/view/DD15DB03CE69454B3F18B0A74381ED2C/S0022109016000247a.pdf/div-class-title-making-waves-to-innovate-or-be-a-fast-second-div.pdf |
| Ending Page | 433 |
| Page Count | 19 |
| Starting Page | 415 |
| ISSN | 00221090 |
| e-ISSN | 17566916 |
| DOI | 10.1017/s0022109016000247 |
| Journal | Journal of Financial and Quantitative Analysis |
| Issue Number | 2 |
| Volume Number | 51 |
| Language | English |
| Publisher | Cambridge University Press (CUP) |
| Publisher Date | 2016-04-01 |
| Access Restriction | Open |
| Subject Keyword | Journal of Financial and Quantitative Analysis |
| Content Type | Text |
| Resource Type | Article |
| Subject | Finance Accounting Economics and Econometrics |
