Abstract
A popular view in the industrial policy debate is that cooperation among firms’ R&D departments should be encouraged. This study presents the first empirical test of the effectiveness of such subsidies using a database of competitors in 45 technological races. The results indicate that subsidies that require cooperation in the form of result-sharing agreements increase the likelihood of cooperation significantly, but they decrease incentives to conduct R&D. Subsidy programs such as EUREKA that require cooperation, but do not require result-sharing agreements, do not increase the likelihood of cooperation. They do, however, increase incentives to conduct R&D somewhat, to about the same extent as subsidies not requiring cooperation.
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Fölster, S. (1995). Should Cooperative R&D Be Subsidized?: An Empirical Analysis. In: van Witteloostuijn, A. (eds) Market Evolution. Studies in Industrial Organization, vol 20. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-8428-9_4
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DOI: https://doi.org/10.1007/978-94-015-8428-9_4
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