Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93775
Authors: 
Fan, Cuihong
Wolfstetter, Elmar G.
Year of Publication: 
2006
Series/Report no.: 
SFB/TR 15 Discussion Paper 165
Abstract: 
We reconsider the justifications of R&D subsidies by Spencer and Brander (1983) and others by allowing firms to pool R&D investments and license innovations. In equilibrium R&D joint ventures are formed and licensing occurs in a way that eliminates the strategic benefits of R&D investment in the subsequent oligopoly game. Nevertheless, governments subsidize their domestic firms in order to raise their bargaining position in the joint venture. This holds true regardless of whether governments offer either unconditional or conditional subsidies. This suggests an alternative explanation of the observed proliferation of R&D subsidies.
Subjects: 
patent licensing
industrial organization
R&D subsidies
research joint ventures
technology policy
JEL: 
L13
O34
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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