Public Subsidies and Cooperation in Research and Development. Evidence from the LAB

Antonio Acconcia, Sergio Beraldo, Carlo Capuano and Stimolo Marco ()
Additional contact information
Stimolo Marco: Department of Economics and Statistics, University of Naples ‘Federico II’, Piazzale R. Martelli, 8, 60121, Ancona, Italy

The B.E. Journal of Economic Analysis & Policy, 2023, vol. 23, issue 3, 727-760

Abstract: We implement an experimental design based on a duopoly game in order to analyse the impact of public subsidies on the willingness to cooperate in research and development (R&D) activities. We first implement six experimental markets by exogenously varying the level of knowledge spillovers (low or high) and the intensity of competition in the product market (low, intermediate, or high). We find that the probability of cooperation increases in the level of spillovers and decreases in that of market competition. We then replicate the six experimental markets by subsidising subjects who cooperate. Whenever they are sufficient to change the incentive structure of the game, subsidies substantially increase the probability of cooperation, causing, however, a reduction of R&D investments. Overall, our evidence suggests that, depending on the characteristics of the market, the provision of subsidies is not always desirable. These might be redundant because firms have sufficient private incentives to invest cooperatively in R&D, or even counterproductive, as they might induce firms to significantly reduce R&D investments compared to the noncooperative scenario.

Keywords: cooperation in R&D; knowledge spillovers; market competition; public subsidies (search for similar items in EconPapers)
JEL-codes: L24 O3 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejeap-2022-0138 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Public subsidies and cooperation in research and development. Evidence from the lab (2022)
Working Paper: Public subsidies and cooperation in research and development: Evidence from the lab (2022)
Working Paper: Public subsidies and cooperation in research and development. Evidence from the lab (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejeap:v:23:y:2023:i:3:p:727-760:n:13

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejeap/html

DOI: 10.1515/bejeap-2022-0138

Access Statistics for this article

The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig

More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().