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Cooperative R&D with durable goods

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  • Amagoia Sagasta

    (University of the Basque Country UPV/EHU)

Abstract

This paper analyzes the effect of the durability of the good produced by a duopolistic industry on research and development investment in the presence of spillovers. We show that the critical spillover level from which cooperation in R&D increases the level of investment is higher when firms produce durable goods and sell at least some units of their output than when firms produce non-durable goods. Moreover, with R&D cooperation investment is highest with renting firms and lowest with renting–selling firms. These findings indicate that R&D cooperation is more difficult to justify when firms produce durable goods in the presence of intertemporal inconsistency problems.

Suggested Citation

  • Amagoia Sagasta, 2019. "Cooperative R&D with durable goods," Journal of Economics, Springer, vol. 128(3), pages 239-258, December.
    • Handle: RePEc:kap:jeczfn:v:128:y:2019:i:3:d:10.1007_s00712-019-00664-w
    DOI: 10.1007/s00712-019-00664-w
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    References listed on IDEAS

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    More about this item

    Keywords

    Durable goods; Cooperative R&D; Spillovers;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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