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Stable R&D Cooperation with Spillovers

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  • Kesteloot, Katrien
  • Veugelers, Reinhilde

Abstract

The literature on the incentives for R&D cooperation with spillovers typically deals only with the factors affecting cooperative profits. This paper focuses on the incentives to cheat and the stability of such cooperative agreements in a repeated game framework. It is shown that the stability of cooperation is influenced by the nature and magnitude of spillovers, relative to the nature and degree of product market competition. While cooperative profits are higher with large positive (exogenous, unintended) know-how spillovers, such as in fundamental research, our analysis shows that it may be easier to sustain cooperation in areas with lower spillovers, such as applied research, because of the smaller incentives to cheat on the initial agreement, at least when firms produce substitutes. Alternatively, the possibility of technology sharing i.e., intended or endogenous spillovers), besides R&D coordination, not only increases cooperative profits but also reduces the incentives to defect from a cooperative equilibrium. Copyright 1995 by MIT Press.

Suggested Citation

  • Kesteloot, Katrien & Veugelers, Reinhilde, 1995. "Stable R&D Cooperation with Spillovers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(4), pages 651-672, Winter.
  • Handle: RePEc:bla:jemstr:v:4:y:1995:i:4:p:651-72
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    References listed on IDEAS

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    Cited by:

    1. Charbel Macdissi & Syoum Negassi, 2002. "International R&D Spillovers: An Empirical Study," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(2), pages 77-91.
    2. Hottenrott, Hanna & Lopes-Bento, Cindy, 2014. "R&D partnerships and innovation performance: Can there be too much of a good thing?," ZEW Discussion Papers 14-108, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Gamal Atallah, 2003. "Information sharing and the stability of cooperation in research joint ventures," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(6), pages 531-554.
    4. Gamal Atallah, 2002. "Vertical R&D Spillovers, Cooperation, Market Structure, and Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 179-209.
    5. Cassiman, Bruno & Veugelers, Rainhilde, 2003. "Which firms have cooperative R&D agreements with universities? Some empirical evidence from Belgian manufacturing," IESE Research Papers D/502, IESE Business School.
    6. Matthias Bürger, 2011. "Dynamics of Collaborative Invention Tracking Growth of Cooperative and Total Patents in the Region," Jena Economic Research Papers 2011-045, Friedrich-Schiller-University Jena.
    7. Lhuillery, Stéphane & Pfister, Etienne, 2009. "R&D cooperation and failures in innovation projects: Empirical evidence from French CIS data," Research Policy, Elsevier, vol. 38(1), pages 45-57, February.
    8. Schmidt, Tobias, 2005. "Knowledge Flows and R&D Co-operation: Firm-level Evidence from Germany," ZEW Discussion Papers 05-22, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. Bruno Cassiman & Reinhilde Veugelers, 1998. "R&D cooperation and spillovers: Some empirical evidence," Economics Working Papers 328, Department of Economics and Business, Universitat Pompeu Fabra.
    10. Dirk Czarnitzki & Bernd Ebersberger & Andreas Fier, 2007. "The relationship between R&D collaboration, subsidies and R&D performance: Empirical evidence from Finland and Germany," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1347-1366.
    11. Belderbos, Rene & Carree, Martin & Diederen, Bert & Lokshin, Boris & Veugelers, Reinhilde, 2004. "Heterogeneity in R&D cooperation strategies," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1237-1263, November.
    12. repec:eee:techno:v:66-67:y:2017:i::p:28-42 is not listed on IDEAS
    13. Veugelers, Reinhilde & Cassiman, Bruno, 2005. "R&D cooperation between firms and universities. Some empirical evidence from Belgian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 355-379, June.
    14. George Norman & Lynne Pepall, 2004. "Knowledge Spillovers, Mergers and Public Policy in Economic Clusters," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 25(2), pages 155-174, June.
    15. Cozza, Claudio & Perani, Giulio & Zanfei, Antonello, 2016. "Are multinationals better at creating technical linkages with local firms?," Papers in Innovation Studies 2016/14, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    16. Ki H. Kang & Jina Kang, 2009. "Does Partner Type Matter in R&D Collaboration for Product Innovation?," TEMEP Discussion Papers 200906, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2009.
    17. repec:ebl:ecbull:v:15:y:2008:i:19:p:1-11 is not listed on IDEAS
    18. Jorge Gallego & Luis Rubalcaba, 2013. "Patterns of public–private collaboration for innovation in Europe," Chapters,in: Public–Private Innovation Networks in Services, chapter 6, pages 139-163 Edward Elgar Publishing.
    19. Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series 2013_09, Department of Economics, Loughborough University, revised Sep 2013.
    20. M. Pilar Socorro, 2003. "Optimal technology policy: subsidies versus monitoring," UFAE and IAE Working Papers 570.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).

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