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Cooperation or non-cooperation in R&D: how should research be funded?

Marie-Laure Cabon-Dhersin () and Romain Gibert ()
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Marie-Laure Cabon-Dhersin: CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université
Romain Gibert: CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université

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Abstract: This article investigates two research funding policies in a cooperative and a non-cooperative R&D setting: subsidising private research (Spr) and subsidising public research (Spu). We show that R&D cooperation with subsidies (either Spr or Spu) always performs better than R&D cooperation with no subsidy. Furthermore, the Spr policy leads to better performance than the Spu approach does in terms of overall net surplus whether the rms cooperate or not in R&D. Nevertheless, comparing the two research funding policies for the same level of public spending shows that the Spu policy with R&D cooperation is in some cases more eective than the Spr policy, the latter becoming too costly for the government when spillovers are high.

Keywords: R&D Cooperation; R&D spillovers; Knowledge public externalities; Subsidies; Public policy; H2; H4; L3; L5; 03; C7 (search for similar items in EconPapers)
Date: 2018-11-15
New Economics Papers: this item is included in nep-cdm, nep-cse and nep-ino
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02006515
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Published in Economics of Innovation and New Technology, Taylor & Francis (Routledge), 2018, pp.1-22

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