Complementarities and Coopetition in presence of Intangible Resources: Industrial economic and Regulatory Implications

Purpose – The purpose of this article is to develops a model where innovative industries implement coopetition activities by R&D joint ventures and other cooperative agreements. These joint activities are likely to occur in presence of complementarities on demand or supply sides, and raise specific accounting issues concerned with recognition and measurement of intangible resources committed to, and generated from them. Design/methodology/approach – The paper develops a heuristic industrial economic model characterized by joint utility on the demand side, and potential complementarities in R&D activities. Our model describes different scenarios generated by different pricing strategies. In particular, these strategies (implemented by firms or determined by regulators) influence either the network infrastructure investments either the creation and the stability of coopetitive relationships Findings – In the scenarios described emerges that especially accounting for intangible resources related to processes of innovation and R&D should deserve specific attention. Firms ( as the regulators) need to properly account for both hard intangibles that have market prices of reference, and soft and ethereal intangibles that factually have not. A stock method of accounting for intangibles results then to be narrow and biased, because of its focus on hard intangibles alone. A flow method of accounting should be preferred, which tracks the cumulated investment flow of direct and indirect expenditures in innovation and development, properly allocated within and between operators.. Originality/value – The main result of our analysis concerns the suitability of regulatory frameworks that enable to either increase either the positive effects of cooperation (technological standardization, fiscal incentives to welfare-improving innovation and strategy, public research, costumers' protection, and so forth). This aspect is also important for the overall industrial organization. From our theoretical analysis emerges the opportunity of including better recognition and measurement of costing and pricing for regulatory purposes in presence of intangibles and complementarities.