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Competitive and Harmonized R&D Policies for International R&D Alliances involving Asymmetric Firms

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  • Rod Falvey
  • Khemarat Talerngsri Teerasuwannajak

Abstract

We examine research and development (R&D) policies when a national firm forms an R&D alliance with a foreign competitor. Firms differ in their R&D capabilities, and adopt a profit-sharing rule when R&D decisions are coordinated. National R&D tax/subsidy policies are set independently or harmonised. When firms coodinate their R&D decisions and governments choose R&D policies independently, R&D taxes are chosen. But there is no intervention if policies are harmonised. These policy outcomes affect the types of R&D alliance choosen. Agreements to share R&D information may be preferred to those combining coordination of R&D decisions and information sharing because of the R&D tax that coordination attracts.
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  • Rod Falvey & Khemarat Talerngsri Teerasuwannajak, 2016. "Competitive and Harmonized R&D Policies for International R&D Alliances involving Asymmetric Firms," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 302-329, May.
    • Handle: RePEc:bla:reviec:v:24:y:2016:i:2:p:302-329
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