Title

Competitive and harmonised R&D policies for international R&D alliances involving asymmetric firms

Date of this Version

3-28-2012

Document Type

Journal Article

Publication Details

Published version

Falvey, R. & Teerasuwannajak, K. (2012). Competitive and harmonised R&D policies for international R&D alliances involving asymmetric firms (March 28, 2012). University of Nottingham Research Paper No. 2012/03.

Available at SSRN: http://ssrn.com/abstract=2030227 or http://dx.doi.org/10.2139/ssrn.2030227

© Copyright The Authors, 2012

Abstract

We examine research and development (R&D) policies when a national firm forms an R&D alliance with a foreign competitor. Firms differ in their R&D capabilities, and adopt a profit-sharing rule when R&D decisions are coordinated. National R&D tax/subsidy policies are set independently or harmonized. When firms coordinate their R&D decisions and governments choose R&D policies independently, R&D taxes are chosen. But there is no intervention if policies are harmonized. These policy outcomes affect the types of R&D alliance choosen. Agreements to share R&D information may be preferred to those combining coordination of R&D decisions and information sharing because of the R&D tax that coordination attracts.