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Endogenous protection of R&D investments

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  • Chrysovalantou Milliou

Abstract

We examine firms' incentives to protect their non-cooperative R&D investments from spilling over to competitors. We show that, contrary to findings in most of the literature, the lack of full appropriability can lead to an increase in R&D investments. Consequently, as long as the R&D spillovers are not too strong, firms decide to let their R&D knowledge flow. Since, as we show, welfare is higher when R&D spillovers are present, it follows that public policies that promote the dissemination of technological knowledge could be welfare-enhancing.

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  • Chrysovalantou Milliou, 2009. "Endogenous protection of R&D investments," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 184-205, February.
    • Handle: RePEc:cje:issued:v:42:y:2009:i:1:p:184-205
    DOI: 10.1111/j.1540-5982.2008.01504.x
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    Cited by:

    1. Fouad Ouardighi & Matan Shnaiderman & Federico Pasin, 2014. "Research and Development with Stock-Dependent Spillovers and Price Competition in a Duopoly," Journal of Optimization Theory and Applications, Springer, vol. 161(2), pages 626-647, May.
    2. Buccella, Domenico & Fanti, Luciano & Gori, Luca, 2023. "The disclosure decision game: Subsidies and incentives for R&D activity," Mathematical Social Sciences, Elsevier, vol. 125(C), pages 11-26.
    3. Clark, Derek J. & Sand, Jan Yngve, 2010. "Endogenous technology sharing in R&D intensive industries," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-48.
    4. Noriaki Matsushima & Koki Arai & Ikuo Ishibashi & Fumio Sensui, 2011. "The effects of non-assertion of patents provisions: R&D incentives in vertical relationships," ISER Discussion Paper 0807, Institute of Social and Economic Research, Osaka University.
    5. Zeineb Dinar, 2014. "Transboundary Pollution, R&D Spillovers, Absorptive Capacity and International Trade," International Journal of Economics and Financial Issues, Econjournals, vol. 4(3), pages 501-513.
    6. Maria Luisa Petit & Francesca Sanna-Randaccio & Roberta Sestini, 2012. "R&D and foreign direct investment with asymmetric spillovers," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(2), pages 125-150, October.
    7. Buccella Domenico & Fanti Luciano & Gori Luca, 2023. "The R&D Investment Decision Game with Product Differentiation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 23(2), pages 601-637, June.
    8. You, Jing & Imai, Katsushi S. & Gaiha, Raghav, 2016. "Declining Nutrient Intake in a Growing China: Does Household Heterogeneity Matter?," World Development, Elsevier, vol. 77(C), pages 171-191.
    9. DongJoon Lee & Joonghwa Oh, 2022. "Strategic commitments of downstream investment firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2098-2107, September.
    10. Chrysovalantou Miliou & Emmanuel Petrakis, 2015. "Vertical Integration, Knowledge Disclosure and Decreasing Rival's Cost," Working Papers 1507, University of Crete, Department of Economics.
    11. Noriaki Matsushima & Laixun Zhao, 2015. "Strategic dual sourcing as a driver for free revealing of innovation," ISER Discussion Paper 0936, Institute of Social and Economic Research, Osaka University.
    12. Zhang, Yanfang, 2022. "Competitive investments between basic R&D and applied R&D with information spillovers," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 707-722.
    13. Buccella, Domenico & Fanti, Luciano & Gori, Luca, 2021. "A contribution to the theory of R&D investments," GLO Discussion Paper Series 940, Global Labor Organization (GLO).
    14. Milliou, Chrysovalantou & Petrakis, Emmanuel, 2012. "Vertical integration, knowledge disclosure and decreasing rival's cost," UC3M Working papers. Economics we1213, Universidad Carlos III de Madrid. Departamento de Economía.
    15. Noriaki Matsushima & Laixun Zhao, 2018. "Technology spillovers and outside options in a bilateral duopoly," ISER Discussion Paper 1039, Institute of Social and Economic Research, Osaka University.
    16. Samano, Mario & Santugini, Marc & Zaccour, Georges, 2017. "Dynamics in research joint ventures and R&D collaborations," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 70-92.
    17. Slim Ben Youssef & Michèle Breton & Georges Zaccour, 2013. "Cooperating and Non-cooperating Firms in Inventive and Absorptive Research," Journal of Optimization Theory and Applications, Springer, vol. 157(1), pages 229-251, April.
    18. Nahid Masoudi & Georges Zaccour, 2018. "Adaptation and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 1-21, September.
    19. Lacetera, Nicola & Zirulia, Lorenzo, 2012. "Individual preferences, organization, and competition in a model of R&D incentive provision," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 550-570.
    20. Dong, Gang & Zheng, Shiyuan & Lee, Paul Tae-Woo, 2018. "The effects of regional port integration: The case of Ningbo-Zhoushan Port," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 120(C), pages 1-15.

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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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