Do Research Joint Ventures Serve a Collusive Function?
Michelle Sovinsky Goeree
University of Southern California
Claremont McKenna College - Robert Day School of Economics and Finance; RAND
Robert Day School of Economics and Finance Research Paper No. 2009-12
Institute for Empirical Research in Economics University of Zurich Working Paper No. 448
Every year thousands of firms are engaged in research joint ventures (RJV), where all knowledge gained through R&D is shared among members. Most of the empirical literature assumes members are non-cooperative in the product market. But many RJV members are rivals leaving open the possibility that firms may form RJVs to facilitate collusion. We exploit variation in RJV formation generated by a policy change that affects the collusive benefits but not the research synergies associated with an RJV. We estimate an RJV participation equation and find the decision to join is impacted by the policy change. Our results are consistent with research joint ventures serving a collusive function.
Number of Pages in PDF File: 37
Keywords: research and development, research joint ventures, antitrust policy
JEL Classification: L24, L44, K21, O32working papers series
Date posted: July 23, 2008
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