Research Joint Ventures, Optimal Licensing, and the R&D Subsidy Policy

Fan Cuihong and Elmar Wolfstetter
Additional contact information
Fan Cuihong: Shanghai University of Finance and Economics, cuihongf@mail.shufe.edu.cn

The B.E. Journal of Theoretical Economics, 2008, vol. 8, issue 1, 19

Abstract: We reconsider the justifications of the R&D subsidies of Spencer and Brander (1983), by allowing firms to form a research joint venture (RJV) and license innovations. If governments offer unconditional subsidies, an RJV is formed and the strategic benefits of R&D subsidies vanish. Nevertheless, governments subsidize their domestic firms to enhance their bargaining position in the joint venture subgame. If governments offer subsidies conditional on forming resp. not forming an RJV, the game has multiple equilibria: one that restores the Spencer and Brander result, and another in which governments induce the formation of an RJV by a combination of conditional taxes and subsidies.

Keywords: patent licensing; joint ventures; industrial organization (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2202/1935-1704.1432 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
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:bejtec:v:8:y:2008:i:1:n:20

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

DOI: 10.2202/1935-1704.1432

Access Statistics for this article

The B.E. Journal of Theoretical Economics is currently edited by Burkhard C. Schipper

More articles in The B.E. Journal of Theoretical Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().