FANDOM


Original paper: Jeroen Hinloopen, Strategic R&D Co-operatives, Research in Economics, Volume 54, Issue 2, June 2000, Pages 153–185.

plagiarism in: Vania SenaThe Return of the Prince of Denmark: A Survey on Recent Developments in the Economics of Innovation, The Economic Journal, Volume 114, Issue 496, pages F312–F332, June 2004.

From page 155- of original:

"The explanation for this general finding lies in the interaction between two externalities associated with strategic R&D investments (see Kamien, Muller & Zang, 1992; Hinloopen, 1997a,b). On the one hand, devoting resources to R&D increases the innovator’s efficiency of production and thus rewards it with a larger market share at the expense of its competitors. That is, any firm’s R&D investment has an impact on all firms’profits. On the other hand, there is the free flow of novel information from an innovator to its competitors, thereby increasing the latter’s production efficiency. The first of these effects, labelled by Kamien, Muller & Zang, 1992, as the combined-profits externality, can either be positive or negative with respect to the incentive to invest in R&D. The second, identified as the competitive-advantage externality, is unambiguously negative. In deciding how much to invest in R&D, individual firms always take the competitive-advantage externality into account. R&D co-ooperatives, in addition, internalize the combined-profits externality. The fact that co-operative R&D exceeds non-co-operative R&D when technological spillovers are relatively large thus means that in that case the combined-profits externality is positive, and that it outweighs the free-rider effect (i.e. the competitive-advantage externality)."

Copied version from page F321-

"The explanation for this result lies in the interaction between the two externalities associated with strategic R&D investments and identified by Kamien et al. (1992). On the one hand, devoting resources to R&D increases the innovator’s efficiency of production and thus rewards it with a larger market share at the expense of the competitors, that is any firm’s R&D investment has an impact on all firms’ profits. On the other hand, there is a free flow of information from the innovator to its competitor, so increasing the latter’s production efficiency. The first effect (labelled the combined profits externality) can have either a positive or a negative impact of the firm’s incentive to invest in R&D. The second effect (named the competitive advantage externality) always has a negative impact. The fact that cooperative R&D exceeds non-cooperative R&D when technological spillovers are relatively large means that in this case, the combined profit externality is positive and that it always outweighs the free-rider effect."

Second paper cites first only at some other point.

Ad blocker interference detected!


Wikia is a free-to-use site that makes money from advertising. We have a modified experience for viewers using ad blockers

Wikia is not accessible if you’ve made further modifications. Remove the custom ad blocker rule(s) and the page will load as expected.