Information Sharing, Research Co-Ordination and Membership of Research Joint Ventures

41 Pages Posted: 24 Jan 2002

See all articles by Giorgio Barba Navaretti

Giorgio Barba Navaretti

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM); University of Milan - Centro Studi Luca d'Agliano (LdA)

Patrizia Bussoli

Deutsche Bank, London ; Fondazione Eni Enrico Mattei (FEEM), Milan; Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

David Ulph

University College London - Department of Economics; Government of the United Kingdom - Inland Revenue

Georg von Graevenitz

University College London - Centre for Economic Learning and Social Evolution (ELSE)

Date Written: January 2002

Abstract

This Paper examines which firms from a heterogeneous pool are more likely to join together and form a research joint venture (RJV). It differs from previous contributions as it introduces a set of realistic hypothesis on the characteristics of research co-operation and information sharing. Research paths can be substitute or complementary. This affects the nature of and consequently the gains from co-operation. The model shows that gains from co-operation are likely to be larger in the second case, as the probability of making a discovery is higher. This Paper also assumes that firms do not share information voluntarily if they do not co-operate only when the firms' products are substitute. If the firms' products are complementary there may be gains in sharing information also under non co-operation. This eliminates the gains from co-operation arising from information sharing. If this is the case, RJVs are more likely to be formed between firms producing substitute products. If we combine these two results we have the prediction that firms co-operate in research when they produce substitute products and when they follow complementary research paths. The empirical analysis carried out on a sample of European RJVs confirms and supports this prediction. The model also carefully explores the role of asymmetries in costs between the two firms. It shows that larger initial asymmetries reduce the information-sharing gains from RJV-formation but increase the research co-ordination gains. This result is supported by the empirical analysis, which shows that gains from RJV formation are largest for intermediate levels of asymmetry.

JEL Classification: F23, L22, O31, O32

Suggested Citation

Barba Navaretti, Giorgio and Bussoli, Patrizia and Ulph, David and von Graevenitz, Georg, Information Sharing, Research Co-Ordination and Membership of Research Joint Ventures (January 2002). Available at SSRN: https://ssrn.com/abstract=298278

Giorgio Barba Navaretti (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

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University of Milan - Centro Studi Luca d'Agliano (LdA) ( email )

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Patrizia Bussoli

Deutsche Bank, London ( email )

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Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

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David Ulph

University College London - Department of Economics ( email )

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Georg Von Graevenitz

University College London - Centre for Economic Learning and Social Evolution (ELSE)

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London WC1E 6BT
United Kingdom

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