Competitive and harmonized R&D policies for international R&D alliances involving asymmetric firms
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We examine R&D policies when a national firm forms an R&D alliance with a foreign competitor. Firms differ in R&D capabilities, select among three forms of R&D alliance and adopt a profit-sharing rule if they coordinate their R&D decisions. When firms coordinate their R&D decisions and governments choose R&D policies independently, R&D taxes are chosen, but if governments harmonize their policies, they decide not to intervene. These policy outcomes affect the types of R&D alliance chosen. Agreements to share R&D information can outperform those with both coordination and sharing as a result of the R&D tax that coordination attracts.
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