IDEAS home Printed from https://ideas.repec.org/a/spr/jqecon/v17y2019i4d10.1007_s40953-019-00161-3.html
   My bibliography  Save this article

When Spillovers Enhance R&D Incentives

Author

Listed:
  • Rittwik Chatterjee

    (Centre for Studies in Social Sciences)

  • Srobonti Chattopadhyay

    (Vidyasagar College for Women)

  • Tarun Kabiraj

    (Indian Statistical Institute)

Abstract

It is commonly believed that spillover reduces R&D incentives of a firm. This happens because of the appropriability problem. However, some empirical literature shows the possibility of enhanced R&D incentives under spillovers. In the literature this is explained under incomplete information, but we show this theoretically under complete information. We show in particular that in a duopoly there are situations when with no spillovers only one firm invests in R&D, but under spillovers both the firms invest. This occurs when there is complementarity in research and the spillover rate lies in an interval specified by the size of R&D investment.

Suggested Citation

  • Rittwik Chatterjee & Srobonti Chattopadhyay & Tarun Kabiraj, 2019. "When Spillovers Enhance R&D Incentives," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(4), pages 857-868, December.
    • Handle: RePEc:spr:jqecon:v:17:y:2019:i:4:d:10.1007_s40953-019-00161-3
    DOI: 10.1007/s40953-019-00161-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40953-019-00161-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40953-019-00161-3?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. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    2. Chatterjee, Rittwik & Chattopadhyay, Srobonti & Kabiraj, Tarun, 2018. "Spillovers and R&D Incentive under Incomplete Information," MPRA Paper 85089, University Library of Munich, Germany.
    3. De Bondt, Raymond, 1997. "Spillovers and innovative activities," International Journal of Industrial Organization, Elsevier, vol. 15(1), pages 1-28, February.
    4. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    5. Sasan Bakhtiari & Robert Breunig, 2018. "The role of spillovers in research and development expenditure in Australian industries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(1), pages 14-38, January.
    6. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
    7. Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-121, January.
    8. Levin, Richard C, 1988. "Appropriability, R&D Spending, and Technological Performance," American Economic Review, American Economic Association, vol. 78(2), pages 424-428, May.
    9. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hurmelinna-Laukkanen, Pia & Yang, Jialei, 2022. "Distinguishing between appropriability and appropriation: A systematic review and a renewed conceptual framing," Research Policy, Elsevier, vol. 51(1).

    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. Chatterjee, Rittwik & Chattopadhyay, Srobonti & Kabiraj, Tarun, 2018. "When Spillovers Enhance R&D Incentives," MPRA Paper 88743, University Library of Munich, Germany.
    2. Kaiser, Ulrich, 2002. "Measuring knowledge spillovers in manufacturing and services: an empirical assessment of alternative approaches," Research Policy, Elsevier, vol. 31(1), pages 125-144, January.
    3. Gamal Atallah, 2002. "Vertical R&D Spillovers, Cooperation, Market Structure, and Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 179-209.
    4. Bruno Cassiman & Reinhilde Veugelers, 1998. "R&D cooperation and spillovers: Some empirical evidence," Economics Working Papers 328, Department of Economics and Business, Universitat Pompeu Fabra.
    5. Yannis Caloghirou & Stavros Ioannides & Nicholas S. Vonortas, 2003. "Research Joint Ventures," Journal of Economic Surveys, Wiley Blackwell, vol. 17(4), pages 541-570, September.
    6. Harabi, Najib, 1995. "Channels of R&D Spillovers: An Empirical Investigation," MPRA Paper 26270, University Library of Munich, Germany.
    7. Siotis, Georges & Marín Uribe, Pedro Luis, 2002. "Public Policies Towards Research Joint Venture Formation: Designs and Outcomes," CEPR Discussion Papers 3772, C.E.P.R. Discussion Papers.
    8. Rittwik Chatterjee & Srobonti Chattopadhyay & Tarun Kabiraj, 2018. "Spillovers and R&D Incentive under Incomplete Information," Studies in Microeconomics, , vol. 6(1-2), pages 50-65, June.
    9. Ronald Goettler & Brett Gordon, 2014. "Competition and product innovation in dynamic oligopoly," Quantitative Marketing and Economics (QME), Springer, vol. 12(1), pages 1-42, March.
    10. Graevenitz, Georg von, 2004. "Spillovers Reconsidered: Analysing Economic Welfare under complementarities in R&D," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 29, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    11. Anna Hammerschmidt, 2006. "A strategic investment game with endogenous absorptive capacity," Department of Economics Working Papers wuwp092, Vienna University of Economics and Business, Department of Economics.
    12. Miyagiwa, Kaz & Ohno, Yuka, 2002. "Uncertainty, spillovers, and cooperative R&D," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 855-876, June.
    13. Milliou, Chrysovalantou, 2006. "Endogenous protection of R and D investments," UC3M Working papers. Economics we066325, Universidad Carlos III de Madrid. Departamento de Economía.
    14. Harabi, Najib, 1991. "Einflussfaktoren von Forschung und Entwicklung in der Schweizer Industrie: Ergebnisse einer schriftlichen Expertenbefragung [Factors Affecting Research and Development - Results of a Survey in Swis," MPRA Paper 5257, University Library of Munich, Germany.
    15. Mari­n, Pedro L. & Siotis, Georges, 2008. "Public policies towards Research Joint Venture: Institutional design and participants' characteristics," Research Policy, Elsevier, vol. 37(6-7), pages 1057-1065, July.
    16. 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.
    17. Aikaterini KOKKINOU, 2010. "Economic growth, innovation and collaborative research and development activities," Management & Marketing, Economic Publishing House, vol. 5(1), Spring.
    18. Chatterjee, Rittwik & Chattopadhyay, Srobonti & Kabiraj, Tarun, 2018. "Spillovers and R&D Incentive under Incomplete Information," MPRA Paper 85089, University Library of Munich, Germany.
    19. Heidi A. Pickman, 1998. "The effect of environmental regulation on environmental innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 7(4), pages 223-233, September.
    20. Masao Nakamura & Mariko Sakakibara, 2003. "Knowledge sharing in cooperative research and development," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 24(2-3), pages 117-132.

    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:spr:jqecon:v:17:y:2019:i:4:d:10.1007_s40953-019-00161-3. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.