| By: |
Duso, Tomaso;
Röller, Lars-Hendrik;
Seldeslachts, Jo |
| Abstract: |
This paper tests whether upstream R&D cooperation leads to downstream
collusion. We consider an oligopolistic setting where firms enter in research
joint ventures (RJVs) to lower production costs or coordinate on collusion in
the product market. We show that a sufficient condition for identifying
collusive behavior is a decline in the market share of RJV-participating
firms, which is also necessary and sufficient for a decrease in consumer
welfare. 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 which reduce consumer welfare. By contrast, RJVs among
non-competitors are efficiency enhancing. -- |
| Keywords: |
Research Joint Ventures,Innovation,Collusion,NCRA |
| JEL: |
K21 L24 L44 D22 O32 |
| Date: |
2012 |
| URL: |
http://d.repec.org/n?u=RePEc:zbw:dicedp:79&r=tid |