IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-02006515.html
   My bibliography  Save this paper

Cooperation or non-cooperation in R&D: how should research be funded?

Author

Listed:
  • Marie-Laure Cabon-Dhersin

    () (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

  • Romain Gibert

    () (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

Abstract

This article investigates two research funding policies in a cooperative and a non-cooperative R&D setting: subsidising private research (Spr) and subsidising public research (Spu). We show that R&D cooperation with subsidies (either Spr or Spu) always performs better than R&D cooperation with no subsidy. Furthermore, the Spr policy leads to better performance than the Spu approach does in terms of overall net surplus whether the rms cooperate or not in R&D. Nevertheless, comparing the two research funding policies for the same level of public spending shows that the Spu policy with R&D cooperation is in some cases more eective than the Spr policy, the latter becoming too costly for the government when spillovers are high.

Suggested Citation

  • Marie-Laure Cabon-Dhersin & Romain Gibert, 2018. "Cooperation or non-cooperation in R&D: how should research be funded?," Post-Print hal-02006515, HAL.
  • Handle: RePEc:hal:journl:hal-02006515
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02006515
    as

    Download full text from publisher

    File URL: https://hal.archives-ouvertes.fr/hal-02006515/document
    Download Restriction: no

    References listed on IDEAS

    as
    1. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-1137, December.
    2. Gamal Atallah, 2014. "Conditional R&D subsidies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(2), pages 179-214, March.
    3. 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.
    4. Amir, Rabah, 2000. "Modelling imperfectly appropriable R&D via spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1013-1032, October.
    5. Tom-Reiel Heggedal, 2015. "Knowledge spillovers and R&D subsidies to new, emerging technologies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 24(7), pages 710-733, October.
    6. Beath, John & Owen, Robert F. & Poyago-Theotoky, Joanna & Ulph, David, 2003. "Optimal incentives for income-generation in universities: the rule of thumb for the Compton tax," International Journal of Industrial Organization, Elsevier, vol. 21(9), pages 1301-1322, November.
    7. Veugelers, Reinhilde & Cassiman, Bruno, 2005. "R&D cooperation between firms and universities. Some empirical evidence from Belgian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 355-379, June.
    8. Marie‐Laure Cabon‐Dhersin & Emmanuelle Taugourdeau, 2018. "Location and research activities organization: Could public/private cooperation be harmful?," Papers in Regional Science, Wiley Blackwell, vol. 97(4), pages 883-907, November.
    9. Richard E. Romano, 1989. "Aspects of R&D Subsidization," The Quarterly Journal of Economics, Oxford University Press, vol. 104(4), pages 863-873.
    10. Carlo Capuano & Iacopo Grassi, 2019. "Spillovers, product innovation and R&D cooperation: a theoretical model," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 28(2), pages 197-216, February.
    11. Sasan Bakhtiari & Robert Breunig, 2018. "The role of spillovers in research and development expenditure in Australian industries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(1), pages 14-38, January.
    12. Najoua Boufaden & Anne Plunket, 2007. "Proximity and Innovation: Do Biotechnology Firms Located in the Paris Region Benefit from Localized Technological Externalities ?," Annals of Economics and Statistics, GENES, issue 87-88, pages 197-220.
    13. Autant-Bernard, Corinne, 2001. "Science and knowledge flows: evidence from the French case," Research Policy, Elsevier, vol. 30(7), pages 1069-1078, August.
    14. 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.
    15. Rabah Amir & Niels Nannerup & Anna Stepanova & Eline Eguiazarova, 2002. "Monopoly versus R&D‐integrated Duopoly," Manchester School, University of Manchester, vol. 70(1), pages 88-100, January.
    16. Bettina Becker, 2015. "Public R&D Policies And Private R&D Investment: A Survey Of The Empirical Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 917-942, December.
    17. Ben R. Martin, 2016. "R&D policy instruments -- a critical review of what we do and don’t know," Industry and Innovation, Taylor & Francis Journals, vol. 23(2), pages 157-176, February.
    18. Maria José Gil-Moltó & Joanna Poyago-Theotoky & Vasileios Zikos, 2011. "R&D Subsidies, Spillovers, and Privatization in Mixed Markets," Southern Economic Journal, Southern Economic Association, vol. 78(1), pages 233-255, July.
    19. Silipo, Damiano B., 2008. "Incentives and forms of cooperation in research and development," Research in Economics, Elsevier, vol. 62(2), pages 101-119, June.
    20. Amir, Rabah & Evstigneev, Igor & Wooders, John, 2003. "Noncooperative versus cooperative R&D with endogenous spillover rates," Games and Economic Behavior, Elsevier, vol. 42(2), pages 183-207, February.
    21. Marco Marinucci, 2012. "A primer on R&D cooperation among firms," Questioni di Economia e Finanza (Occasional Papers) 130, Bank of Italy, Economic Research and International Relations Area.
    22. Dimos, Christos & Pugh, Geoff, 2016. "The effectiveness of R&D subsidies: A meta-regression analysis of the evaluation literature," Research Policy, Elsevier, vol. 45(4), pages 797-815.
    23. Audretsch, David B. & Bozeman, Barry & Combs, Kathryn L. & Feldman, Maryann & Link, Albert N. & Siegel, Donald S. & Stephan, Paula, 2002. "The Economics of Science and Technology," The Journal of Technology Transfer, Springer, vol. 27(2), pages 155-203, April.
    24. Marie‐Laure Cabon‐Dhersin & Emmanuelle Taugourdeau, 2018. "Location and research activities organization: Could public/private cooperation be harmful?," Papers in Regional Science, Wiley Blackwell, vol. 97(4), pages 883-907, November.
    25. Jeroen Hinloopen, 1997. "Subsidizing cooperative and noncooperative R&D in duopoly with spillovers," Journal of Economics, Springer, vol. 66(2), pages 151-175, June.
    26. Jeroen Hinloopen, 2000. "More on subsidizing cooperative and noncooperative R&D in duopoly with spillovers," Journal of Economics, Springer, vol. 72(3), pages 295-308, October.
    27. Joanna Poyago-Theotoky, 2009. "University-industry technology transfer options: licensing or research joint venture?," Economics Bulletin, AccessEcon, vol. 29(4), pages 2582-2591.
    28. Michael L. Katz, 1986. "An Analysis of Cooperative Research and Development," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 527-543, Winter.
    29. Kesavayuth, Dusanee & Zikos, Vasileios, 2013. "R&D versus output subsidies in mixed markets," Economics Letters, Elsevier, vol. 118(2), pages 293-296.
    30. Andrew Brod & Ram Shivakumar, 1997. "R&D Cooperation and the Joint Exploitation of R&D," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 673-684, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marie-Laure Cabon-Dhersin & Romain Gibert, 2019. "R&D cooperation, proximity and distribution of public funding between public and private research sectors," Working Papers hal-02006489, HAL.

    More about this item

    Keywords

    R&D Cooperation; R&D spillovers; Knowledge public externalities; Subsidies; Public policy; H2; H4; L3; L5; 03; C7;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-02006515. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.