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Public policy and R&D when research joint ventures are costly

Author

Listed:
  • Jon Vilasuso
  • Mark R. Frascatore

Abstract

In this paper we examine the role of policy when forming a R&D joint venture is costly. Contrary to previous studies, we document an active role for public policy, since the interests of firms are not necessarily aligned with societal interests. The nature of policy, however, depends on the joint venture cost. If it is relatively low, then policy may call for subsidizing the joint venture to encourage collaboration. If forming a joint venture is very costly, however, then there are cases where social welfare is improved if policy encourages R&D competition with no joint venture. JEL Classification: D43, L13 Politique publique et R&D quand les alliances stratégiques en recherche sont coûteuses. Ce mémoire examine le rôle de la politique publique quand la mise en place d'une alliance stratégique en recherche est coûteuse. Contrairement à ce qu'ont suggéré des études antérieures, les auteurs montrent qu'il y a un rôle positif pour la politique publique, à proportion que les intérêts des entreprises ne sont pas nécessairement alignés sur les intérêts de la société. La nature de la politique dépend cependant du coût de l'alliance stratégique. Si le coût est faible, alors une politique de subvention pour encourager la collaboration peut s'imposer. Si le coût est élevé, alors il existe des cas où une politique de concurrence dans le R&D sans alliance stratégique peut mieux servir le mieux être collectif.

Suggested Citation

  • Jon Vilasuso & Mark R. Frascatore, 2000. "Public policy and R&D when research joint ventures are costly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(3), pages 818-839, August.
  • Handle: RePEc:wly:canjec:v:33:y:2000:i:3:p:818-839
    DOI: 10.1111/0008-4085.00043
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    Cited by:

    1. Buckley, Neil & Mestelman, Stuart & Shehata, Mohamed, 2003. "Subsidizing public inputs," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 819-846, March.
    2. Busom, Isabel & Fernández-Ribas, Andrea, 2008. "The impact of firm participation in R&D programmes on R&D partnerships," Research Policy, Elsevier, vol. 37(2), pages 240-257, March.
    3. Bourreau, Marc & Dogan, PInar, 2010. "Cooperation in product development and process R&D between competitors," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 176-190, March.
    4. Bourreau, Marc & Doğan, Pınar & Manant, Matthieu, 2016. "Size of RJVs with partial cooperation in product development," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 77-106.
    5. Ouchida, Yasunori & Goto, Daisaku, 2016. "Environmental research joint ventures and time-consistent emission tax: Endogenous choice of R&D formation," Economic Modelling, Elsevier, vol. 55(C), pages 179-188.
    6. Alberto Marzucchi & Davide Antonioli & Sandro Montresor, 2012. "Research cooperation within and across regional boundaries. Does innovation policy add anything?," JRC Working Papers JRC76320, Joint Research Centre (Seville site).
    7. Yasunori Ouchida & Daisaku Goto, 2014. "Environmental Research Joint Ventures and Time-Consistent Emission Tax," Working Papers 2014.35, Fondazione Eni Enrico Mattei.
    8. Falvey, Rod & Poyago-Theotoky, Joanna & Teerasuwannajak, Khemarat Talerngsri, 2013. "Coordination costs and research joint ventures," Economic Modelling, Elsevier, vol. 33(C), pages 965-976.
    9. Poyago-Theotoky, J.A., 2007. "The organization of R&D and environmental policy," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 63-75, January.
    10. Kim, Jeong-Eon, 2003. "Three essays on welfare implications of R&D policies in the presence of spillovers," ISU General Staff Papers 200301010800001597, Iowa State University, Department of Economics.
    11. Rod Falvey & Joanna Poyago-Theotoky & Khemarat Teerasuwannajak, 2006. "Coordination Costs: A Drawback for Research Joint Ventures?," Discussion Paper Series 2006_3, Department of Economics, Loughborough University, revised Feb 2006.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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