Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203134
Authors: 
Karbowski, Adam
Year of Publication: 
2019
Citation: 
[Journal:] Journal of Business Economics and Management [ISSN:] 2029-4433 [Volume:] 20 [Year:] 2019 [Issue:] 6 [Pages:] 1121–1142
Abstract: 
The aim of this article is to investigate the impacts of cooperative and non-cooperative R&D strategies on product innovation and firm performance. Based on the industrial economics literature and the optimisation model, R&D competition, R&D cartelisation, and full industry cartelisation strategies of firms operating on a market with differentiated goods and simultaneous price and quality competition are considered. It is showed that R&D cartelisation entails a loss of firm's product innovation compared with R&D competition. However, profit-maximising firms do not prefer the R&D competition strategy. They prefer to pursue either R&D cartelisation or full industry cartelisation strategies, depending on the elasticity of demand with respect to the firm's investment in R&D. The social cost of R&D cartelisation is a loss of product innovation, and the social cost of full industry cartelisation is both the loss of product innovation and the loss of consumer surplus due to a relatively high price and low output of the final product. The latter results carry significant implications for the modern business and public policy.
Subjects: 
Innovation
Firm performance
JEL: 
L1
O3
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article
Document Version: 
Published Version

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