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Market Share, R&D Cooperation, and EU Competition Policy

Author

Listed:
  • Richard Ruble

    (EMLYON Business School, Ecully, F-69134, France)

  • Bruno Versaevel

    (EMLYON Business School & CNRS, GATE, 69134 Ecully cedex France)

Abstract

Current EU policy exempts horizontal R&D agreements from antitrust con- cerns when the combined market shares of participants are low enough. This paper argues that existing theory does not support limiting the exemption to low market shares. This is done by introducing a set of non-innovating outside ï¬ rms to the standard framework to assess what link might exist between the market share of innovating ï¬ rms and the product market beneï¬ ts of cooperation. With R&D output choices, the market share criterion, while it rules out the most so- cially harmful R&D cooperation agreements, also hinders the most beneï¬ cial ones. With R&D input choices, cooperation may actually be desirable in concentrated industries, and harmful in more competitive ones. If R&D cooperation does have anti-competitive effects in product markets, it seems that these are therefore best addressed by other tools than market share criteria.

Suggested Citation

  • Richard Ruble & Bruno Versaevel, 2009. "Market Share, R&D Cooperation, and EU Competition Policy," Working Papers 0910, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    • Handle: RePEc:gat:wpaper:0910
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    References listed on IDEAS

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    More about this item

    Keywords

    R&D; Cooperation; Competition; Regulation;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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