COOPERATIVE R&D WITH DIFFERENTIATED PRODUCTS IN VERTICALLY RELATED INDUSTRIES
This paper studies the impact of cooperative R&D on innovation, welfare, and profitability in vertically related industries with differentiated products. The model incorporates two vertically related industries, with horizontal spillovers within industries and vertical spillovers between them....
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics, University of Tuzla
2020-11-01
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| Series: | Economic Review |
| Subjects: | |
| Online Access: | https://www.er.ef.untz.ba/index.php/er/article/view/66 |
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| Summary: | This paper studies the impact of cooperative R&D on innovation, welfare, and profitability in vertically related industries with differentiated products. The model incorporates two vertically related industries, with horizontal spillovers within industries and vertical spillovers between them. Upstream firms produce a homogeneous intermediate good, while downstream firms provide differentiated products. Three types of R&D cooperation are studied: no cooperation, horizontal cooperation, and vertical cooperation. The comparison of cooperation settings in terms of R&D and profitability shows that although vertical cooperation yields higher innovation and welfare, it may lead to over–investment in R&D.
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| ISSN: | 1512-8962 2303-680X |