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R&D cooperation with asymmetric spillovers

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  • Gamal Atallah

Abstract

. This paper analyses R&D cooperation with asymmetric spillovers. It is shown that the change in R&D by a firm following cooperation is proportional to the gap between the spillover rate transmitted by that firm and a critical level of spillovers. In consequence, cooperation increases total R&D investments when the average of firms’ spillover rates is sufficiently high. Whereas with symmetric spillovers cooperation is always beneficial to firms, with asymmetric spillovers only a very limited range of spillovers makes cooperation beneficial to both firms. Asymmetries also create a potential conflict between maximizing total welfare and maximizing effective cost reduction. JEL classification: L13, O33 Coopération en R&D avec effets de retombée asymétriques. Ce mémoire analyse l’effet de la coopération en R&D quand il y a des asymétries dans les effets externes technologiques. On montre que le changement dans la R&D d’une entreprise à la suite de la coopération est proportionnel à l’écart entre l’externalité transmise par cette entreprise et une valeur critique de l’externalité. En conséquence, la coopération augmente les investissements totaux en R&D quand le taux de retombée moyen est suffisamment élevé. Alors que la coopération est toujours bénéfique lorsque les externalités sont symétriques, les asymétries rendent la coopération non bénéfique pour au moins l’une des entreprises pour un vaste éventail de paramètres. Les asymétries peuvent aussi créer un conflit potentiel entre la maximisation du bien‐être total et la maximisation des réduction de coûts effectifs.

Suggested Citation

  • Gamal Atallah, 2005. "R&D cooperation with asymmetric spillovers," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(3), pages 919-936, August.
  • Handle: RePEc:wly:canjec:v:38:y:2005:i:3:p:919-936
    DOI: 10.1111/j.0008-4085.2005.00309.x
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    Cited by:

    1. Chiara Conti & Marco A. Marini, 2019. "Are you the right partner? R&D agreement as a screening device," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 28(3), pages 243-264, April.
    2. Eren Inci, 2009. "R&D tax incentives: a reappraisal," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(6), pages 797-821, December.
    3. Gamal Atallah, 2005. "Partner Selection in R&D Cooperation," CIRANO Working Papers 2005s-24, CIRANO.
    4. repec:ebl:ecbull:v:12:y:2005:i:18:p:1-11 is not listed on IDEAS
    5. Marek Jemala, 2009. "Strategic Business Alliances: Qualitative Analysis of Specific Factors of Business Clusters
      [Strategické podnikateľské aliancie: kvalitatívna analýza špecifických faktorov podnikania v klastroch]
      ," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2009(4), pages 19-33.
    6. 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.
    7. Tsuyoshi Toshimitsu, 2014. "Strategic Product R&D Investment Policy under International Rivalry in the Presence of Demand Spillover Effects," International Economic Journal, Taylor & Francis Journals, vol. 28(2), pages 293-309, June.
    8. Tran, Tat Thanh & Zikos, Vasileios, 2017. "R&D networks among suppliers and manufacturers," Economic Modelling, Elsevier, vol. 60(C), pages 151-161.
    9. Dirk Czarnitzki & Kornelius Kraft, 2012. "Spillovers of innovation activities and their profitability," Oxford Economic Papers, Oxford University Press, vol. 64(2), pages 302-322, April.
    10. Yasunori Ouchida & Daisaku Goto, 2012. "What is the socially desirable formation of environmental R&D?," IDEC DP2 Series 2-6, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
    11. Sara Amoroso & Simone Vannuccini, 2019. "Teaming up with Large R&D Investors: Good or Bad for Knowledge Production and Diffusion?," SPRU Working Paper Series 2019-20, SPRU - Science Policy Research Unit, University of Sussex Business School.
    12. Yasunori Ouchida & Daisaku Goto, 2014. "Environmental Research Joint Ventures and Time-Consistent Emission Tax," Working Papers 2014.35, Fondazione Eni Enrico Mattei.
    13. Falvey, Rod & Poyago-Theotoky, Joanna & Teerasuwannajak, Khemarat Talerngsri, 2013. "Coordination costs and research joint ventures," Economic Modelling, Elsevier, vol. 33(C), pages 965-976.
    14. Marco A. Marini & Maria L. Petit & Roberta Sestini, 2014. "Strategic timing in R&D agreements," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(3), pages 274-303, April.
    15. 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.
    16. Deming Zeng & Luyun Xu & Xia-an Bi, 2017. "Effects of asymmetric knowledge spillovers on the stability of horizontal and vertical R&D cooperation," Computational and Mathematical Organization Theory, Springer, vol. 23(1), pages 32-60, March.
    17. 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.
    18. Müller, Aranja & Zaby, Alexandra K., 2019. "Research joint ventures and technological proximity," Research Policy, Elsevier, vol. 48(5), pages 1187-1200.
    19. Chiara CONTI, 2013. "Asymmetric information in a duopoly with spillovers: new findings on the effects of RJVs," Departmental Working Papers 2013-04, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    20. 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.
    21. Müller, Aranja & Zaby, Alexandra, 2015. "Research Joint Ventures and Technological Proximity," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112989, Verein für Socialpolitik / German Economic Association.
    22. Jan Vandekerckhove & Raymond De Bondt, 2008. "Asymmetric Spillovers And Investments In Research And Development Of Leaders And Followers," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(5), pages 417-433.
    23. Gamal Atallah, 2005. "Research Joint Ventures Cartelization with Asymmetric R&D Spillovers," Economics Bulletin, AccessEcon, vol. 12(18), pages 1-11.
    24. Adam Karbowski & Jacek Prokop, 2018. "R&D activities of enterprises, product market leadership, and collusion," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 36(2), pages 735-753.
    25. Dusanee Kesavayuth & Sang-Ho Lee & Vasileios Zikos, 2018. "Merger and Innovation Incentives in a Differentiated Industry," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 25(2), pages 207-221, May.

    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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