 Do Research Joint Ventures Serve a Collusive Function?Michelle Sovinsky Journal of the European Economic Association, 2022, vol. 20, issue 1, 430-475 Abstract: Every year thousands of firms are engaged in research joint ventures (RJV), where all knowledge gained through research and development (R&D) is shared among members. Most of the empirical literature assumes members are non-cooperative in the product market. But many RJV members are rivals leaving open the possibility that firms may form RJVs to facilitate product market collusion. We examine this by exploiting variation in RJV formation generated by a policy change that affects the collusive benefits but not the research synergies associated with a RJV. We use data on RJVs formed between 1986 and 2001 together with firm-level information from Compustat to estimate a RJV participation equation. After correcting for the endogeneity of R&D and controlling for RJV characteristics and firm attributes, we find the decision to join is impacted by the policy change. We also find the magnitude is significant: the policy change resulted in an average drop in the probability of joining a RJV ofamong computer and semiconductor manufacturers,among telecommunications firms, andamong petroleum refining firms. Our results are consistent with research joint ventures serving a collusive function. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:20:y:2022:i:1:p:430-475. Access Statistics for this article Journal of the European Economic Association is currently edited by Romain Wacziarg More articles in Journal of the European Economic Association from European Economic Association |
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