R&D cooperation with asymmetric spillovers
AbstractThis paper analyses R&D cooperation with asymmetric spillovers. It is shown that the change in R&D by a firm following cooperation is proportional to the gap between the spillover rate transmitted by that firm and a critical level of spillovers. In consequence, cooperation increases total R&D investments when the average of firms' spillover rates is sufficiently high. Whereas with symmetric spillovers cooperation is always beneficial to firms, with asymmetric spillovers only a very limited range of spillovers makes cooperation beneficial to both firms. Asymmetries also create a potential conflict between maximizing total welfare and maximizing effective cost reduction.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 38 (2005)
Issue (Month): 3 (August)
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