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R&D spillovers and information exchange: a case study

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Abstract

R&D spillovers can be viewed to arise as a result of a voluntary information exchange between firms. In this paper we extend this theory of R&D spillovers to a context where the spillover effect is on R&D dollars and occurs in a vertical relationship. We show how the exchange of information is more likely to take place in industries with a more extensive product differentiation. Our model predicts that the maximum incentives to exchange information can be found from the vertically related industries. Finally, we present a historical case study on an information-exchange agreement between Micronas and Micro Power Systems so as to support the predictions of the model.

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Notes

  1. For a recent analysis of the existence and stability of equilibria in the Cournot competition, see Okuguchi (2012).

  2. Micronas was used as MPS’s second source from the beginning of 1986 until the end of 1989. The volume of the second source activity was, however, smaller than the firms had initially expected.

  3. . The wording in italics is as in the original contracts. The original documents use the abbreviation MPSI (instead of MPS) for Micro Power System Inc.

  4. Section 2.15 is the section for confidentiality clause.

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Acknowledgments

We thank an anonymous referee, Iftekhar Hasan, Mikko Mustonen, Mihkel Tombak, and Otto Toivanen for helpful comments. We should also like to thank Heikki Ihantola, Urho Ilmonen, Pauli Immonen, Anneli Saarikoski, Eero Vallström, Tapio Wiik, and Titta Wäre for useful and informative discussions, help with archives and documents. The views expressed in this paper are those of the author(s) and do not necessarily reflect the position of the EIB.

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Authors and Affiliations

  1. University of Helsinki, Helsinki, Finland

    Klaus Kultti

  2. Hanken School of Economics, Helsinki, Finland

    Tuomas Takalo

  3. European Investment Bank, Luxembourg, Luxembourg

    Tanja Tanayama

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  1. Klaus Kultti
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  2. Tuomas Takalo
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  3. Tanja Tanayama
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Correspondence to Klaus Kultti.

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Kultti, K., Takalo, T. & Tanayama, T. R&D spillovers and information exchange: a case study. Eurasian Econ Rev 5, 63–76 (2015). https://doi.org/10.1007/s40822-015-0024-7

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  • DOI: https://doi.org/10.1007/s40822-015-0024-7

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