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Journal of Economics

, Volume 128, Issue 3, pp 239–258 | Cite as

Cooperative R&D with durable goods

  • Amagoia SagastaEmail author
Article
  • 86 Downloads

Abstract

This paper analyzes the effect of the durability of the good produced by a duopolistic industry on research and development investment in the presence of spillovers. We show that the critical spillover level from which cooperation in R&D increases the level of investment is higher when firms produce durable goods and sell at least some units of their output than when firms produce non-durable goods. Moreover, with R&D cooperation investment is highest with renting firms and lowest with renting–selling firms. These findings indicate that R&D cooperation is more difficult to justify when firms produce durable goods in the presence of intertemporal inconsistency problems.

Keywords

Durable goods Cooperative R&D Spillovers 

JEL Classification

D43 L13 O3 

Notes

Acknowledgements

The author would like to thank the editor, Giacomo Corneo, two anonymous reviewers, Ana I. Saracho, Iñaki Aguirre, and Miguel González Maestre for helpful comments and suggestions. The usual disclaimer applies. Financial support from Spain’s Ministerio de Economía y Competitividad (ECO2012-35820 and ECO2015-64467-R (MINECO/FEDER, UE)) and from the Departamento de Educación, Universidades e Investigación del Gobierno Vasco (IT-783-13) is gratefully acknowledged.

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Copyright information

© Springer-Verlag GmbH Austria, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of Economic Analysis II and Bridge, Faculty of Economics and BusinessUniversity of the Basque Country UPV/EHUBilbaoSpain

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