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Effects of asymmetric knowledge spillovers on the stability of horizontal and vertical R&D cooperation

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  • Deming Zeng

    (Hunan University)

  • Luyun Xu

    (Hunan University)

  • Xia-an Bi

    (Hunan Normal University)

Abstract

In order to investigate the role of asymmetric spillovers in the stability of R&D cooperation, this paper distinguishes two different types of cooperative partners, and uses a game theory approach to reveal the relationship between asymmetric spillovers and R&D investment in the horizontally and vertically related R&D cooperation. In the horizontal R&D cooperation, higher incoming spillovers and lower outgoing spillovers induce firms to invest on R&D efforts as agreed. However, it is the contradiction between horizontal firms’ attitudes towards asymmetric spillovers that leads to the inherent instability of the cooperation. In the vertical R&D cooperation, our results question the usually held opinion about the effects of asymmetric spillovers on the decision of R&D investment. The incoming spillovers are less important in the innovation process for vertically related R&D cooperation. A firm tends to under-invest on the arranged level of R&D efforts when its incoming spillovers increase. Our results also show that efficient mechanisms to restrain firms’ non-cooperative behavior are essential to improve the stability of horizontal and vertical R&D cooperation.

Suggested Citation

  • Deming Zeng & Luyun Xu & Xia-an Bi, 2017. "Effects of asymmetric knowledge spillovers on the stability of horizontal and vertical R&D cooperation," Computational and Mathematical Organization Theory, Springer, vol. 23(1), pages 32-60, March.
    • Handle: RePEc:spr:comaot:v:23:y:2017:i:1:d:10.1007_s10588-016-9216-2
    DOI: 10.1007/s10588-016-9216-2
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