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R&D networks among suppliers and manufacturers

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  • Tran, Tat Thanh
  • Zikos, Vasileios

Abstract

Empirical evidence documents that R&D networks among vertically related firms are very common. Yet there is currently no formal modeling of such networks. In this paper, we develop a model of R&D networks among manufacturers and their suppliers in order to examine which network architectures emerge in equilibrium, and what their implications are from a welfare viewpoint. Our analysis reveals that private incentives to form R&D networks align with societal ones when vertical relations are non-exclusive, but may conflict when vertical relations are exclusive. In terms of policy, stricter antitrust regulation of exclusive vertical relations may, under certain conditions, be desirable from a social viewpoint.

Suggested Citation

  • Tran, Tat Thanh & Zikos, Vasileios, 2017. "R&D networks among suppliers and manufacturers," Economic Modelling, Elsevier, vol. 60(C), pages 151-161.
    • Handle: RePEc:eee:ecmode:v:60:y:2017:i:c:p:151-161
    DOI: 10.1016/j.econmod.2016.09.006
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    References listed on IDEAS

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    Cited by:

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    2. Yang, Jinyu & Zhang, Wenqing & Zhao, Xiande, 2024. "How can suppliers strategically involve downstream manufacturers in research and development collaboration? A knowledge spillover perspective," European Journal of Operational Research, Elsevier, vol. 314(1), pages 122-135.
    3. Zhang, Xindong & Zou, Meifeng & Liu, Weimin & Zhang, Yuefei, 2020. "Does a firm’s supplier concentration affect its cash holding?," Economic Modelling, Elsevier, vol. 90(C), pages 527-535.

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    Keywords

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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