Do Research Joint Ventures Serve a Collusive Function?
Institute for Empirical Research in Economics University of Zurich Working Paper No. 448
37 Pages Posted: 23 Jul 2008
Date Written: 2009
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.
Keywords: research and development, research joint ventures, antitrust policy
JEL Classification: L24, L44, K21, O32
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