Cooperative R&D with durable goods

Amagoia Sagasta

Journal of Economics, 2019, vol. 128, issue 3, No 3, 239-258

Abstract: Abstract This paper analyzes the effect of the durability of the good produced by a duopolistic industry on research and development investment in the presence of spillovers. We show that the critical spillover level from which cooperation in R&D increases the level of investment is higher when firms produce durable goods and sell at least some units of their output than when firms produce non-durable goods. Moreover, with R&D cooperation investment is highest with renting firms and lowest with renting–selling firms. These findings indicate that R&D cooperation is more difficult to justify when firms produce durable goods in the presence of intertemporal inconsistency problems.

Keywords: Durable goods; Cooperative R&D; Spillovers (search for similar items in EconPapers)
JEL-codes: D43 L13 O3 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:128:y:2019:i:3:d:10.1007_s00712-019-00664-w

DOI: 10.1007/s00712-019-00664-w

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