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Market structure and R&D investment spillovers

Authors
Journal
Economic Modelling
0264-9993
Publisher
Elsevier
Identifiers
DOI: 10.1016/j.econmod.2014.08.014
Keywords
  • Research And Development (R&D)
  • Oligopolistic Market Structure
  • R&D Investment Spillovers

Abstract

Abstract This paper examines research and development (R&D) investment spillovers across different market structures. In particular, we extend the recent work in Matsumura et al. (2013) to incorporate R&D investment spillovers. When the market is a duopoly, noncooperative (cooperative) R&D investment is preferred for small (large) spillovers of less (more) than half. We show that as a market structure becomes more competitive, noncooperative R&D investment is more likely to be preferred. Moreover, noncooperative R&D is not always decreasing with the intensity of competition, even though it is ultimately zero with perfect competition. Our theoretical results fit well with existing empirical findings.

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