R&D cooperation with asymmetric spillovers

Gamal Atallah

Canadian Journal of Economics, 2005, vol. 38, issue 3, 919-936

Abstract: This paper analyses R&D cooperation with asymmetric spillovers. It is shown that the change in R&D by a firm following cooperation is proportional to the gap between the spillover rate transmitted by that firm and a critical level of spillovers. In consequence, cooperation increases total R&D investments when the average of firms' spillover rates is sufficiently high. Whereas with symmetric spillovers cooperation is always beneficial to firms, with asymmetric spillovers only a very limited range of spillovers makes cooperation beneficial to both firms. Asymmetries also create a potential conflict between maximizing total welfare and maximizing effective cost reduction.

JEL-codes: L13 O33 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (32)

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