Escalation of advertising or R&D expenditure can give rise to endogenous barriers to entry. This paper investigates whether escalation of investments in R&D raises the return to investments in advertising or vice versa. We provide three empirical tests using a dataset which combines stock market...

We analyse economic welfare in R&D intensive industries under varying assumptions on the spillover process. The focus lies on spillover processes with complementary R&D investments such as those modelling absorptive capacity. There spillovers give rise to both negative and positive...