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R&D networks: theory, empirics and policy implications


König, Michael D; Liu, Xiaodong; Zenou, Yves (2014). R&D networks: theory, empirics and policy implications. Working paper series / Department of Economics 142, University of Zurich.

Abstract

We study a structural model of R&D alliance networks in which firms jointly form R&D collaborations to lower their production costs while competing on the product market. We derive the Nash equilibrium of this game, provide a welfare analysis and determine the optimal R&D subsidy program that maximizes total welfare. We also identify the key firms, i.e. the firms whose exit would reduce welfare the most. We then structurally estimate our model using a panel dataset of R&D collaborations and annual company reports. We use our estimates to identify the key firms and analyze the impact of R&D subsidy programs. Moreover, we analyze temporal changes in the rankings of key firms and how these changes affect the optimal R&D policy.

Abstract

We study a structural model of R&D alliance networks in which firms jointly form R&D collaborations to lower their production costs while competing on the product market. We derive the Nash equilibrium of this game, provide a welfare analysis and determine the optimal R&D subsidy program that maximizes total welfare. We also identify the key firms, i.e. the firms whose exit would reduce welfare the most. We then structurally estimate our model using a panel dataset of R&D collaborations and annual company reports. We use our estimates to identify the key firms and analyze the impact of R&D subsidy programs. Moreover, we analyze temporal changes in the rankings of key firms and how these changes affect the optimal R&D policy.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D85, L24, O33
Uncontrolled Keywords:R&D networks, key firms, optimal subsidies
Language:English
Date:March 2014
Deposited On:05 Mar 2014 15:18
Last Modified:08 Dec 2017 04:43
Series Name:Working paper series / Department of Economics
Number of Pages:83
ISSN:1664-7041
Official URL:http://www.econ.uzh.ch/static/wp/econwp142.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php

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