R&D strategy in international mixed duopoly with research spillovers

Shoji Haruna, Rajeev K. Goel

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)

Abstract

This paper examines the international mixed duopoly behaviour with research spillovers. Using a two-stage game with Research and Development (R&D) and output, we investigate the effects of imperfectly appropriable R&D on optimal R&D strategies of a domestic public firm and a foreign private firm across different market interactions: (i) international R&D competition, (ii) only the foreign firm conducts R&D, (iii) only the domestic public firm conducts R&D, (iv) no firm conducts R&D, and (v) research joint venture. The results show that firms' research performances are determined by the degree of spillovers and the optimal R&D strategies involve R&D competition. Spillovers are shown to be socially beneficial and their absence can prove to be a strategic deterrent, with the public firm monopolising the market. Some of these findings contrast with the traditional models of oligopoly (with or without R&D) and mixed oligopoly (without R&D).

Original languageEnglish
Pages (from-to)88-103
Number of pages16
JournalAustralian Economic Papers
Volume54
Issue number2
DOIs
Publication statusPublished - Jun 1 2015

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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