Collusion through Joint R&D: An Empirical Assessment

Arbeitspapier

This paper tests whether upstream R&D cooperation leads to downstream collusion. We consider an oligopolistic setting where firms enter in research joint ventures (RJVs) to lower production costs or coordinate on collusion in the product market. We show that a sufficient condition for identifying collusive behavior is a decline in the market share of RJV-participating firms, which is also necessary and sufficient for a decrease in consumer welfare. Using information from the US National Cooperation Research Act, we estimate a market share equation correcting for the endogeneity of RJV participation and R&D expenditures. We find robust evidence that large networks between direct competitors -created through firms being members in several RJVs at the same time- are conducive to collusive outcomes in the product market which reduce consumer welfare. By contrast, RJVs among non-competitors are efficiency enhancing.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 10-112/1

Classification and Topics

• Classification: Wirtschaft ; Antitrust Law ; Contracting Out; Joint Ventures; Technology Licensing ; Antitrust Policy and Public Enterprises, Nonprofit Institutions, and Professional Organizations ; Firm Behavior: Empirical Analysis ; Management of Technological Innovation and R&D
• Subject: Research Joint Ventures ; Innovation ; Collusion ; NCRA ; Forschungskooperation ; Innovation ; Marktanteil ; Kartell ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Duso, Tomaso ; Roeller, Lars-Hendrik ; Seldeslachts, Jo
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/86651
• Last update: 10.03.2025, 11:42 AM CET