Collusion Through Joint R&D: An Empirical Assessment

Tomaso Duso, Lars-Hendrik Röller and Jo Seldeslachts
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Lars-Hendrik Röller: European School of Management and Technology

The Review of Economics and Statistics, 2014, vol. 96, issue 2, 349-370

Abstract: This paper tests whether upstream R&D cooperation leads to downstream collusion. We show that a sufficient condition for identifying collusive behavior is a decline in the market share of firms participating in research joint ventures (RJVs). Using information from the U.S. National Cooperation Research Act, we estimate a market share equation correcting for the endogeneity of RJV participation and R&D expenditures. We find robust evidence that large networks between direct competitors, created through firms being members in several RJVs at the same time, are conducive to collusive outcomes in the product market that reduce consumer welfare. By contrast, RJVs among noncompetitors are efficiency enhancing. © 2014 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: research joint ventures; innovation; R&D; collusion; NCRA (search for similar items in EconPapers)
JEL-codes: D22 K21 L24 L44 O32 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (50)

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Related works:
Working Paper: Collusion through joint R&D: An empirical assessment (2012)
Working Paper: Collusion through Joint R&D: An Empirical Assessment (2010)
Working Paper: Collusion through Joint R&D: An Empirical Assessment (2010)
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