Collusion through joint R&D: An empirical assessment
AbstractThis paper tests whether upstream R&D cooperation leads to downstream collusion. We consider an oligopolistic setting where firms enter in research joint ventures (RJVs) to lower production costs or coordinate on collusion in the product market. We show that a sufficient condition for identifying collusive behavior is a decline in the market share of RJV-participating firms, which is also necessary and sufficient for a decrease in consumer welfare. Using information from the U.S. National Cooperation Research Act, we estimate a market share equation correcting for the endogeneity of RJV participation and R&D expenditures. We find robust evidence that large networks between direct competitors - created through firms being members in several RJVs at the same time - are conducive to collusive outcomes in the product market which reduce consumer welfare. By contrast, RJVs among non-competitors are efficiency enhancing. --
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Bibliographic InfoPaper provided by Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) in its series DICE Discussion Papers with number 79.
Date of creation: 2012
Date of revision:
Research Joint Ventures; Innovation; Collusion; NCRA;
Other versions of this item:
- Duso, Tomaso & Röller, Lars-Hendrik & Seldeslachts, Jo, 2010. "Collusion through Joint R&D: An Empirical Assessment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 343, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Tomaso Duso & Lars-Hendrik Roeller & Jo Seldeslachts, 2010. "Collusion through Joint R&D: An Empirical Assessment," Tinbergen Institute Discussion Papers 10-112/1, Tinbergen Institute.
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
- L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-22 (All new papers)
- NEP-COM-2012-12-22 (Industrial Competition)
- NEP-CSE-2012-12-22 (Economics of Strategic Management)
- NEP-IND-2012-12-22 (Industrial Organization)
- NEP-INO-2012-12-22 (Innovation)
- NEP-IPR-2012-12-22 (Intellectual Property Rights)
- NEP-LAW-2012-12-22 (Law & Economics)
- NEP-PPM-2012-12-22 (Project, Program & Portfolio Management)
- NEP-TID-2012-12-22 (Technology & Industrial Dynamics)
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