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Competitive and Harmonized R&D Policies for International R&D Alliances involving Asymmetric Firms
Author(s) -
Falvey Rod,
Teerasuwannajak Khemarat Talerngsri
Publication year - 2016
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12214
Subject(s) - alliance , profit (economics) , profit sharing , microeconomics , economics , business , finance , political science , law
We examine R&D policies when a national firm forms an R&D alliance with a foreign competitor. Firms differ in R&D capabilities, select among three forms of R&D alliance and adopt a profit‐sharing rule if they coordinate their R&D decisions. When firms coordinate their R&D decisions and governments choose R&D policies independently, R&D taxes are chosen, but if governments harmonize their policies, they decide not to intervene. These policy outcomes affect the types of R&D alliance chosen. Agreements to share R&D information can outperform those with both coordination and sharing as a result of the R&D tax that coordination attracts.