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R&D Spillovers, Innovation, and Entry

  • Khazabi, Massoud
  • Quyen, Nguyen

The paper extends a theoratical framework to analyze the impact of R&D spillovers on entry and the resulting equilibrium market structure. It is shown that the degree of spillovers plays a fundamental role on the number of firms entering the market, their R&D activities, and social welfare. The analysis suggests that social welfare is maximized at some intermediate degree of spillovers. The policy implication of this result is that neither complete protection of intellectual property right nor lax enforcement of patent laws is socially optimal.

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File URL: http://mpra.ub.uni-muenchen.de/39460/1/MPRA_paper_39460.pdf
File Function: original version
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39460.

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Date of creation: 01 Jul 2011
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Handle: RePEc:pra:mprapa:39460
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Web page: http://mpra.ub.uni-muenchen.de

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  1. Gamal Atallah, 2002. "Vertical R&D Spillovers, Cooperation, Market Structure, and Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 179-209.
  2. Nisvan Erkal:Daniel Piccinin, 2007. "Cooperative R&D under Uncertainty with Free Entry," Department of Economics - Working Papers Series 999, The University of Melbourne.
  3. Suetens, Sigrid, 2005. "Cooperative and noncooperative R&D in experimental duopoly markets," International Journal of Industrial Organization, Elsevier, vol. 23(1-2), pages 63-82, February.
  4. Gamal Atallah, 2007. "Entry Deterrence through Fixed Cost Reducing R&D," Rivista di Politica Economica, SIPI Spa, vol. 97(4), pages 49-78, July-Augu.
  5. Poyago-Theotoky, Joanna, 1995. "Equilibrium and Optimal Size of a Research Joint Venture in an Oligopoly with Spillovers," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 209-26, June.
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