DP1654 Why Firms Form Research Joint Ventures: Theory and Evidence

Author(s): Lars-Hendrik Röller, Ralph Siebert, Mihkel Tombak
Publication Date: May 1997
Keyword(s): Joint Ventures, Product Market Competition, Research And Development
JEL(s): L0, L6, O3
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1654

The literature on research joint ventures (RJVs) has emphasized internalizing spillovers and cost-sharing as motives for RJV formation. In this paper we develop two additional explanations: product market complementarities and firm heterogeneity. We analyse a model of RJVs with asymmetric firms and differentiated products. We then test these various explanations for RJV formation using data now available through the US National Cooperative Research Act.