Premium
International and National R & D Networks in Unionized Oligopoly
Author(s) -
Kesavayuth Dusanee,
Zikos Vasileios
Publication year - 2013
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/labr.12006
Subject(s) - oligopoly , aggregate (composite) , microeconomics , economics , monetary economics , cournot competition , materials science , composite material
We study the endogenous formation of R & D networks between two domestic and one foreign firms in a unionized oligopoly. We find that the equilibrium networks are sensitive to the extent of knowledge spillovers between networked firms. If spillovers are sufficiently low, the complete network will arise in equilibrium; however, if spillovers are sufficiently high, the foreign partial network that includes a domestic and a foreign firm will arise. Moreover, for intermediate spillovers, no equilibrium network emerges. These results have implications for aggregate outcomes: equilibrium networks are not necessarily optimal in terms of aggregate effective R & D and aggregate firm profits.