Paper #147

Title:

Research joint ventures in an international economy

Author:

Massimo Motta

Date:

November 1995

Abstract:

D'Aspremont and Jacquemin's (1988) model is extended to study alternative configurations of research agreements in a two--country integrated world economy. Under unambiguous conditions on spillovers we show that: 1) Allowing national firms to cooperate in R\&D confers them an advantage over foreign rivals, an effect similar to R\&D subsidies. 2) In a policy game, each government would allow national cooperative agreements. 3) Contrary to other trade policies which lead to a ``prisoners' dilemma'' result, welfare in both countries increases when they both allow R\&D cooperation. 4) Welfare is even higher if a generalized (international) coalition is formed.

Area of Research:

Labour, Public, Development and Health Economics

Published in:

Ricerche Economiche, 50, (1996), pp. 293-315

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