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Japanese Research Consortia: A Microeconometric Analysis of Industrial Policy

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  • Lee Branstetter
  • Mariko Sakakibara
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    Abstract

    The existence of strong spillover' effects of private R&D increases the potential social contribution of R&D but may depress the private incentives to undertake it. R&D consortia offer a potentially effective means of internalizing this externality, and a number of prominent economists have argued for public support of such consortia (e.g., Romer, 1993). Governments in Europe and North America have adopted policies to promote the formation of such consortia, motivated less by economic theory than by the perception that the Japanese government has used such policies to great effect (Tyson, 1992). Despite the existence of a large theoretical literature analyzing the potential benefits and costs of R&D consortia, there has been little corresponding empirical work on their efficacy. In this paper, we undertake the first large-sample econometric study of Japanese government-sponsored research consortia which uses firm-level data on research inputs and outputs to measure the impact of participation on the ex-post research productivity of the firm. We are able to find evidence that frequent participation in these consortia has a positive impact on research expenditure and research productivity. These results hold after controlling for the potential endogeneity of the intensity of participation in consortia to participating firms' research productivity. Furthermore, we find evidence that part of this impact arises from the increased knowledge spillovers that take place within these consortia. Not only are

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6066.

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    Date of creation: Jun 1997
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    Publication status: published as Journal of Industrial Economics, Vol. 46, no. 2 (June 1998): 207-233.
    Handle: RePEc:nbr:nberwo:6066

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    References

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    1. Spencer, Barbara J & Brander, James A, 1983. "International R & D Rivalry and Industrial Strategy," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 707-22, October.
    2. Cockburn, Iain & Henderson, Rebecca, 1994. "Racing to Invest? The Dynamics of Competition in Ethical Drug Discovery," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(3), pages 481-519, Fall.
    3. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
    4. Montalvo, Jose G. & Yafeh, Yishay, 1994. "A microeconometric analysis of technology transfer : The case of licensing agreements of Japanese firms," International Journal of Industrial Organization, Elsevier, vol. 12(2), pages 227-244, June.
    5. Douglas A. Irwin & Peter J. Klenow, 1994. "High Tech R&D Subsidies: Estimating the Effects of Sematech," NBER Working Papers 4974, National Bureau of Economic Research, Inc.
    6. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    7. Sakakibara, Mariko, 1997. "Evaluating government-sponsored R&D consortia in Japan: who benefits and how?," Research Policy, Elsevier, vol. 26(4-5), pages 447-473, December.
    8. Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-21, January.
    9. Zvi Griliches & Jerry A. Hausman, 1984. "Errors in Variables in Panel Data," NBER Technical Working Papers 0037, National Bureau of Economic Research, Inc.
    10. Adam B. Jaffe, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value," NBER Working Papers 1815, National Bureau of Economic Research, Inc.
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    Cited by:
    1. ATALLAH, Gamal, 2000. "Information Sharing and the Stability of Cooperation in Research Joint Ventures," Cahiers de recherche 2000-17, Universite de Montreal, Departement de sciences economiques.
    2. Lynne G. Zucker & Michael R. Darby, 1998. "Capturing Technological Opportunity via Japan's Star Scientists: Evidence from Japanese Firms' Biotech Patents and Products," NBER Working Papers 6360, National Bureau of Economic Research, Inc.
    3. Stolpe, Michael, 2002. "Determinants of knowledge diffusion as evidenced in patent data: the case of liquid crystal display technology," Research Policy, Elsevier, vol. 31(7), pages 1181-1198, September.
    4. Michael Stolpe, 2001. "Mobility of Research Workers and Knowledge Diffusion as Evidenced in Patent Data The Case of Liquid Crystal Display Technoloy," Kiel Working Papers 1038, Kiel Institute for the World Economy.
    5. Paulo Santos & Aurora A.C. Teixeira & Ana Brochado, 2006. "The ‘de-territorialisation of closeness’ - a typology of international successful R&D projects involving cultural and geographic proximity," FEP Working Papers 222, Universidade do Porto, Faculdade de Economia do Porto.

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