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Effects of asymmetric knowledge spillovers on the stability of horizontal and vertical R&D cooperation

Deming Zeng, Luyun Xu () and Xia-an Bi
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Deming Zeng: Hunan University
Luyun Xu: Hunan University
Xia-an Bi: Hunan Normal University

Computational and Mathematical Organization Theory, 2017, vol. 23, issue 1, No 2, 32-60

Abstract: Abstract In order to investigate the role of asymmetric spillovers in the stability of R&D cooperation, this paper distinguishes two different types of cooperative partners, and uses a game theory approach to reveal the relationship between asymmetric spillovers and R&D investment in the horizontally and vertically related R&D cooperation. In the horizontal R&D cooperation, higher incoming spillovers and lower outgoing spillovers induce firms to invest on R&D efforts as agreed. However, it is the contradiction between horizontal firms’ attitudes towards asymmetric spillovers that leads to the inherent instability of the cooperation. In the vertical R&D cooperation, our results question the usually held opinion about the effects of asymmetric spillovers on the decision of R&D investment. The incoming spillovers are less important in the innovation process for vertically related R&D cooperation. A firm tends to under-invest on the arranged level of R&D efforts when its incoming spillovers increase. Our results also show that efficient mechanisms to restrain firms’ non-cooperative behavior are essential to improve the stability of horizontal and vertical R&D cooperation.

Keywords: Asymmetric knowledge spillovers; Horizontal R&D cooperation; Vertical R&D cooperation; Cooperative stability; Game theory (search for similar items in EconPapers)
Date: 2017
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