Strategic Choice of Partners: Research Joint Ventures and Market Power
AbstractThe literature on research joint ventures (RJVs) has emphasized internalizing spillovers and cost-sharing as motives for RJV formation. In this paper we develop an additional explanation: the incentive to exclude rivals in order to gain market power. We illustrate this effect in a simple model of RJV formation with asymmetric firms. We then test our hypothesis by estimating an endogeneous switching model using data from the U.S. National Cooperative Research Act. The empirical findings support our hypothesis that RJVs can be used as an instrument by which firms leverage their market power in the product market.
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Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 2001 with number 185.
Date of creation: 01 Apr 2001
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Research Joint Ventures;
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- L0 - Industrial Organization - - General
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
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