Absorptive capacity and R&D strategy in mixed duopoly with labor-managed and profit-maximizing firms

► The study object includes labor-managed firms, not merely profit-maximizing firms. ► We develop a two-stage R&D game model with spillover and absorptive capacity. ► The effect of absorptive capacity in LMF is compared with the case in PMF. ► We explore the strategic interactions of output, R&D investment and social welfare.