IDEAS home Printed from https://ideas.repec.org/p/hit/hiasdp/2015-02.html

The free-rider problem and the optimal duration of research joint ventures: theory and evidence from the Eureka program

Author

Listed:
  • MIYAGIWA, Kaz
  • SISSOKO, Amy
  • SONG, Huasheng

Abstract

In a research joint venture (RJV), members' contributions consist mostly of personnel and proprietary technical know-how. Since the quantity and quality of such contributions are difficult to verify, each member has the temptation to free-ride on others' contributions. In this paper we show that a RJV can resolve this free-rider problem by pre-committing to its duration. Our model predicts, among others, that a RJV chasing a higher-cost innovation tends to have a shorter duration. We then utilize data from the European Eureka program to investigate the factors determining the durations of Eureka RJVs. We find the Eureka data consonant with the prediction of our model.

Suggested Citation

  • MIYAGIWA, Kaz & SISSOKO, Amy & SONG, Huasheng, 2015. "The free-rider problem and the optimal duration of research joint ventures: theory and evidence from the Eureka program," Discussion paper series 2015-02, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    • Handle: RePEc:hit:hiasdp:2015-02
    as

    Download full text from publisher

    File URL: https://hit-u.repo.nii.ac.jp/record/2055283/files/070_hiasDP15-02.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. d'Aspremont, Claude & Jacquemin, Alexis, 1990. "Cooperative and Noncooperative R&D in Duopoly with Spillovers: Erratum," American Economic Review, American Economic Association, vol. 80(3), pages 641-642, June.
    2. Erkal, Nisvan & Piccinin, Daniel, 2010. "Cooperative R&D under uncertainty with free entry," International Journal of Industrial Organization, Elsevier, vol. 28(1), pages 74-85, January.
    3. Roberto Hernán & Pedro L. Marín & Georges Siotis, 2003. "An empirical evaluation of the determinants of Research Joint Venture Formation," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 75-89, March.
    4. Kogut, Bruce, 1989. "The Stability of Joint Ventures: Reciprocity and Competitive Rivalry," Journal of Industrial Economics, Wiley Blackwell, vol. 38(2), pages 183-198, December.
    5. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    6. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
    7. Ilke Van Beveren & Hylke Vandenbussche, 2010. "Product and process innovation and firms' decision to export," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 3-24.
    8. Mario Cleves & William W. Gould & Roberto G. Gutierrez & Yulia Marchenko, 2010. "An Introduction to Survival Analysis Using Stata," Stata Press books, StataCorp LLC, edition 3, number saus3, March.
    9. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
    10. 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.
    11. Pastor, Maite & Sandonis, Joel, 2002. "Research joint ventures vs. cross licensing agreements: an agency approach," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 215-249, February.
    12. Shapiro, Carl & Willig, Robert D, 1990. "On the Antitrust Treatment of Production Joint Ventures," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 113-130, Summer.
    13. Miyagiwa, Kaz & Ohno, Yuka, 2002. "Uncertainty, spillovers, and cooperative R&D," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 855-876, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kaz Miyagiwa & Aminata Sissoko, 2013. "The free-rider problem and the optimal duration of research joint ventures: theory and evidence from the Eureka program," Working Papers 1302, Florida International University, Department of Economics.
    2. Silipo, Damiano B., 2008. "Incentives and forms of cooperation in research and development," Research in Economics, Elsevier, vol. 62(2), pages 101-119, June.
    3. Duso, Tomaso & Pennings, Enrico & Seldeslachts, Jo, 2010. "Learning dynamics in research alliances: A panel data analysis," Research Policy, Elsevier, vol. 39(6), pages 776-789, July.
    4. Tombak, Mihkel & Röller, Lars-Hendrik & Siebert, Ralph, 2000. "Strategic Choice of Partners: Research Joint Ventures and Market Power," CEPR Discussion Papers 2617, C.E.P.R. Discussion Papers.
    5. Amoroso, S., 2013. "Heterogeneity of innovative, collaborative, and productive firm-level processes," Other publications TiSEM f5784a49-7053-401d-855d-1, Tilburg University, School of Economics and Management.
    6. Falvey, Rod & Poyago-Theotoky, Joanna & Teerasuwannajak, Khemarat Talerngsri, 2013. "Coordination costs and research joint ventures," Economic Modelling, Elsevier, vol. 33(C), pages 965-976.
    7. Iritié, B. G. Jean-Jacques, 2014. "Enjeux des politiques industrielles basées sur les clusters d'innovation: cas des pôles de compétitivité [Issues of Innovative Clusters-based Industrial Policy: Case of Pole of Competitiveness]," MPRA Paper 54429, University Library of Munich, Germany.
    8. repec:dau:papers:123456789/6963 is not listed on IDEAS
    9. BeomJu Park & Chang-Yang Lee, 2023. "Does R&D cooperation with competitors cause firms to invest in R&D more intensively? evidence from Korean manufacturing firms," The Journal of Technology Transfer, Springer, vol. 48(3), pages 1045-1076, June.
    10. Ge, Zehui & Hu, Qiying, 2008. "Collaboration in R&D activities: Firm-specific decisions," European Journal of Operational Research, Elsevier, vol. 185(2), pages 864-883, March.
    11. Meickmann, Felix C., 2023. "Cooperation in knowledge sharing and R&D investment," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 146-164.
    12. repec:dau:papers:123456789/5009 is not listed on IDEAS
    13. Siebert, Ralph Bernd, 2017. "A structural model on the impact of prediscovery licensing and research joint ventures on innovation and product market efficiency," International Journal of Industrial Organization, Elsevier, vol. 54(C), pages 89-124.
    14. Amiram PORATH, 2009. "Management Skills Difference between Low and High R&D Concentration Firms," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 10(2), pages 286-294, May.
    15. Wang, Shixun & Yang, Lihong, 2022. "Spatial competition, strategic R&D and the structure of innovation networks," Journal of Business Research, Elsevier, vol. 139(C), pages 13-31.
    16. Constantine Manasakis & Emmanuel Petrakis & Vasileios Zikos‡, 2014. "Downstream Research Joint Venture with Upstream Market Power," Southern Economic Journal, John Wiley & Sons, vol. 80(3), pages 782-802, January.
    17. 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.
    18. Niedermayer, Andras & Wu, Jianjun, 2013. "Breaking up a research consortium," International Journal of Industrial Organization, Elsevier, vol. 31(4), pages 342-353.
    19. Joanna Poyago-Theotoky & Ben Ferrett, "undated". "Horizontal Agreements and R&D Complementarities: Merger versus RJV," CRIEFF Discussion Papers 1201, Centre for Research into Industry, Enterprise, Finance and the Firm.
    20. Dirk Czarnitzki & Katrin Hussinger & Cédric Schneider, 2015. "R&D Collaboration with Uncertain Intellectual Property Rights," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(2), pages 183-204, March.
    21. Brunner, Philipp & Letina, Igor & Schmutzler, Armin, 2024. "Research joint ventures: The role of financial constraints," European Economic Review, Elsevier, vol. 165(C).
    22. Bernal, Pilar & Carree, Martin & Lokshin, Boris, 2022. "Knowledge spillovers, R&D partnerships and innovation performance," Technovation, Elsevier, vol. 115(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

    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:hit:hiasdp:2015-02. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Digital Resources Section, Hitotsubashi University Library (email available below). General contact details of provider: https://edirc.repec.org/data/ashitjp.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.