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R&D Cost Sharing along the Supply Chain

Author

Listed:
  • Mark R. Frascatore

    (Faculty of Economics and Financial Studies, Clarkson University, U.S.A.)

Abstract

A model of R&D cost sharing between a manufacturer and its component supplier is examined. The manufacturer can pay for a fraction of the supplier's cost-reducing R&D in return for a lower component price, and both firms can improve profits.

Suggested Citation

  • Mark R. Frascatore, 2011. "R&D Cost Sharing along the Supply Chain," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 10(1), pages 1-11, April.
    • Handle: RePEc:ijb:journl:v:10:y:2011:i:1:p:1-11
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    File URL: https://ijbe.fcu.edu.tw/assets/ijbe/past_issue/No.10-1/pdf/vol_10-1-1.pdf
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    File URL: https://ijbe.fcu.edu.tw/assets/ijbe/past_issue/No.10-1/abstract/01.html
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    References listed on IDEAS

    as
    1. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    2. Anthony Creane, 2008. "Input Suppliers, Differential Pricing, and Information Sharing Agreements," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(4), pages 865-893, December.
    3. Lode Li, 2002. "Information Sharing in a Supply Chain with Horizontal Competition," Management Science, INFORMS, vol. 48(9), pages 1196-1212, September.
    4. Creane, Anthony, 2007. "Productivity information in vertical sharing agreements," International Journal of Industrial Organization, Elsevier, vol. 25(4), pages 821-841, August.
    5. Ishii, Akira, 2004. "Cooperative R&D between vertically related firms with spillovers," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1213-1235, November.
    6. Williamson, Oliver E, 1971. "The Vertical Integration of Production: Market Failure Considerations," American Economic Review, American Economic Association, vol. 61(2), pages 112-123, May.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Jens Gudmundsson & Jens Leth Hougaard & Chiu Yu Ko, 2020. "Sharing sequentially triggered losses," IFRO Working Paper 2020/05, University of Copenhagen, Department of Food and Resource Economics.

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    More about this item

    Keywords

    R&D cooperation; supply chain collaboration; research joint ventures;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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