IDEAS home Printed from https://ideas.repec.org/a/bpj/bejtec/v20y2020i2p9n4.html
   My bibliography  Save this article

Product R&D Coopetition and Firm Performance

Author

Listed:
  • Ramsza Michał

    (Department of Mathematics and Mathematical Economics, Warsaw School of Economics, Warsaw, Poland)

  • Karbowski Adam

    (Department of Business Economics, Warsaw School of Economics, Warsaw, Poland)

Abstract

We investigate firms’ behavior in demand-enhancing product R&D. We consider and compare a cooperative and non-cooperative R&D investment setting by firms. In a non-cooperative scenario (R&D competition), firms decide on their R&D investments and outputs unilaterally. In a cooperative scenario (R&D coopetition), firms engage in a bargaining process to reach a binding R&D agreement. Firms through bargaining can reach an R&D agreement which specifies their R&D investment levels. The investment levels under R&D coopetition are higher compared with the investment levels under R&D competition. Firms’ profits are also higher under R&D coopetition compared with R&D competition. We conclude that R&D coopetition can alleviate the individual R&D investment disincentive and work as a strategic instrument that enhances product innovation and firms’ profits.

Suggested Citation

  • Ramsza Michał & Karbowski Adam, 2020. "Product R&D Coopetition and Firm Performance," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 20(2), pages 1-9, June.
    • Handle: RePEc:bpj:bejtec:v:20:y:2020:i:2:p:9:n:4
    DOI: 10.1515/bejte-2018-0141
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejte-2018-0141
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejte-2018-0141?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tishler, Asher & Milstein, Irena, 2009. "R&D wars and the effects of innovation on the success and survivability of firms in oligopoly markets," International Journal of Industrial Organization, Elsevier, vol. 27(4), pages 519-531, July.
    2. Klaus Brockhoff, 1992. "R&D Cooperation Between Firms---A Perceived Transaction Cost Perspective," Management Science, INFORMS, vol. 38(4), pages 514-524, April.
    3. Rosenkranz, Stephanie, 2003. "Simultaneous choice of process and product innovation when consumers have a preference for product variety," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 183-201, February.
    4. Gamal Atallah, 2005. "R&D cooperation with asymmetric spillovers," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 919-936, August.
    5. Aguiar, Luis & Gagnepain, Philippe, 2017. "European cooperative R&D and firm performance: Evidence based on funding differences in key actions," International Journal of Industrial Organization, Elsevier, vol. 53(C), pages 1-31.
    6. Sascha Becker & Peter Egger, 2013. "Endogenous product versus process innovation and a firm’s propensity to export," Empirical Economics, Springer, vol. 44(1), pages 329-354, February.
    7. Pan, Xiaojun & Li, Shoude, 2016. "Dynamic optimal control of process–product innovation with learning by doing," European Journal of Operational Research, Elsevier, vol. 248(1), pages 136-145.
    8. Mora-Valentin, Eva M. & Montoro-Sanchez, Angeles & Guerras-Martin, Luis A., 2004. "Determining factors in the success of R&D cooperative agreements between firms and research organizations," Research Policy, Elsevier, vol. 33(1), pages 17-40, January.
    9. Loof, Hans & Heshmati, Almas, 2002. "Knowledge capital and performance heterogeneity: : A firm-level innovation study," International Journal of Production Economics, Elsevier, vol. 76(1), pages 61-85, March.
    10. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    11. Bourreau, Marc & Dogan, PInar, 2010. "Cooperation in product development and process R&D between competitors," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 176-190, March.
    12. Rosenkranz, Stephanie, 1995. "Innovation and cooperation under vertical product differentiation," International Journal of Industrial Organization, Elsevier, vol. 13(1), pages 1-22, March.
    13. Karbowski, Adam, 2019. "Cooperative and non-cooperative R&D in product innovation and firm performance," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 20(6), pages 1121-1142.
    14. Miguel Gonzalez-Maestre & Diego Penarrubia, 2005. "Cooperation versus competition in product innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(4), pages 305-318.
    15. Jorde, Thomas M & Teece, David J, 1990. "Innovation and Cooperation: Implications for Competition and Antitrust," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 75-96, Summer.
    16. Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-1630, October.
    17. David CARF, 2015. "A model for coopetitive games," Journal of Mathematical Economics and Finance, ASERS Publishing, vol. 1(1), pages 46-75.
    18. Carlo Capuano & Iacopo Grassi, 2019. "Spillovers, product innovation and R&D cooperation: a theoretical model," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 28(2), pages 197-216, February.
    19. Kamien, Morton I. & Zang, Israel, 2000. "Meet me halfway: research joint ventures and absorptive capacity," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 995-1012, October.
    20. Michael L. Katz, 1986. "An Analysis of Cooperative Research and Development," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 527-543, Winter.
    21. repec:srs:volume:v:1:y:2015:i:1:p:46-75 is not listed on IDEAS
    22. Lin, Ping & Saggi, Kamal, 2002. "Product differentiation, process R&D, and the nature of market competition," European Economic Review, Elsevier, vol. 46(1), pages 201-211, January.
    23. Emmanuel Petrakis & Joanna Poyago‐Theotoky, 2002. "R&D Subsidies versus R&D Cooperation in a Duopoly with Spillovers and Pollution," Australian Economic Papers, Wiley Blackwell, vol. 41(1), pages 37-52, March.
    24. repec:srs:journl:volume:v:1:y:2015:i:1:p:46-75 is not listed on IDEAS
    25. Luuk Klomp & George Van Leeuwen, 2001. "Linking Innovation and Firm Performance: A New Approach," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(3), pages 343-364.
    26. Mingqing Xing, 2017. "The Optimal Risk Choice Of Cooperative And Noncooperative R&D In Duopoly With Spillovers," Bulletin of Economic Research, Wiley Blackwell, vol. 69(4), pages 173-185, October.
    27. Cellini, Roberto & Lambertini, Luca, 2002. "A differential game approach to investment in product differentiation," Journal of Economic Dynamics and Control, Elsevier, vol. 27(1), pages 51-62, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bourreau, Marc & Dogan, PInar, 2010. "Cooperation in product development and process R&D between competitors," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 176-190, March.
    2. Bourreau, Marc & Dogan, Pinar & Manant, Matthieu, 2010. "Size of RJVs and Degree of Cooperation in Product Development," Scholarly Articles 4621101, Harvard Kennedy School of Government.
    3. LOPES BENTO Cindy & HOTTENROTT Hanna, 2012. "Quantity or Quality? Collaboration Strategies in Research and Development and Incentives to Patent," LISER Working Paper Series 2012-29, Luxembourg Institute of Socio-Economic Research (LISER).
    4. Chiara CONTI, 2013. "Asymmetric information in a duopoly with spillovers: new findings on the effects of RJVs," Departmental Working Papers 2013-04, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    5. Bourreau, Marc & Doğan, Pınar & Manant, Matthieu, 2016. "Size of RJVs with partial cooperation in product development," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 77-106.
    6. Sara Amoroso & Simone Vannuccini, 2019. "Teaming up with Large R&D Investors: Good or Bad for Knowledge Production and Diffusion?," SPRU Working Paper Series 2019-20, SPRU - Science Policy Research Unit, University of Sussex Business School.
    7. Adam Karbowski & Jacek Prokop, 2018. "R&D activities of enterprises, product market leadership, and collusion," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 735-753.
    8. Kaiser, Ulrich, 2002. "An empirical test of models explaining research expenditures and research cooperation: evidence for the German service sector," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 747-774, June.
    9. René Belderbos & Martin Carree & Boris Lokshin, 2006. "Complementarity in R&D Cooperation Strategies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(4), pages 401-426, June.
    10. Gamal Atallah, 2005. "Partner Selection in R&D Cooperation," Working Papers 0503E, University of Ottawa, Department of Economics.
    11. Lambertini, Luca & Mantovani, Andrea, 2009. "Process and product innovation by a multiproduct monopolist: A dynamic approach," International Journal of Industrial Organization, Elsevier, vol. 27(4), pages 508-518, July.
    12. Lhuillery, Stéphane & Pfister, Etienne, 2009. "R&D cooperation and failures in innovation projects: Empirical evidence from French CIS data," Research Policy, Elsevier, vol. 38(1), pages 45-57, February.
    13. Czarnitzki, Dirk & Hottenrott, Hanna, 2012. "Collaborative R&D as a strategy to attenuate financing constraints," ZEW Discussion Papers 12-049, ZEW - Leibniz Centre for European Economic Research.
    14. Luca Lambertini & Andrea Mantovani, 2010. "Process and product innovation: A differential game approach to product life cycle," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(2), pages 227-252, June.
    15. Spyros Arvanitis, 2009. "How do different motives for R&D cooperation affect firm performance?," KOF Working papers 09-233, KOF Swiss Economic Institute, ETH Zurich.
    16. Spyros Arvanitis & Areti Gkypali & Kostas Tsekouras, 2014. "Knowledge Base, Exporting Activities, Innovation Openness and Innovation Performance," KOF Working papers 14-361, KOF Swiss Economic Institute, ETH Zurich.
    17. Kyung Hwan Baik & Sang-Kee Kim, 2020. "Observable versus unobservable R&D investments in duopolies," Journal of Economics, Springer, vol. 130(1), pages 37-66, June.
    18. Tannista Banerjee & Ralph Siebert, 2013. "The Impact of R&D Cooperation on Drug Variety Offered on the Market: Evidence from the Pharmaceutical Industry," Auburn Economics Working Paper Series auwp2013-20, Department of Economics, Auburn University.
    19. Levin, Mark (Левин, Марк) & Matrosova, K. (Матросова, К.), 2016. "Research, Modeling and Process Management Dissemination of Innovations in Socio-Economic Systems [Исследование, Моделирование И Управление Процессами Распространения Инноваций В Социально-Экономиче," Working Papers 1443, Russian Presidential Academy of National Economy and Public Administration.
    20. Tannistra Banerjee & Stephen Martin, 2015. "Pharmaceutical Regulation and Innovative Performance: A Decision‐theoretic Model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 36(3), pages 177-190, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejtec:v:20:y:2020:i:2:p:9:n:4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.