Process and product R&D by a multiproduct monopolist: a reply to Lin

摘要

With reference to Lambertini (2003), Lin correctly points out that, if R&D efforts for process innovation are endogenous, then process and product R&D are strategic complements. Then, he also proves that the opposite holds when spillovers are nil. Objecting to Lin's second claim, I show that monopoly profits are everywhere increasing in the extent of information sharing within the firm. Consequently, the full internalisation of spillovers restores the complementarity between process R&D and productproliferation.