Firms' R&D Cooperation Behavior in a Supply Chain

Abstract

This study investigates firms' R&D cooperation behavior in a supply chain where two firms first cooperate in R&D investments and then decide the production quantity according to a wholesale price contract. By using a concept named contribution level that measures a firm's technological contribution to the R&D cooperation in the supply chain, we show that both firms can achieve win–win via cartelization only if their contribution levels are Pareto matched, i.e., when each firm's contribution level is comparable to its partner's. When spillovers are endogenized, we further establish that an increasing spillover always benefits both firms without any R&D cooperation, but only benefits the firm whose contribution level is relatively low when under R&D cartels. Finally, we show that the path of first increasing spillovers to be perfect and then forming a cartel has a higher chance of achieving the best mode in terms of profitability.

Supplier’s Joint Investments in Cost Reduction and Quality Improvement in a Decentralized Supply Chain

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Revenue and Knowledge Cooperation Mechanisms between Business Incubators and Venture Capitalists for Collaborative Start-Ups

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Building Relationship Between Oem Customers and Suppliers in Product Innovation Development Processes in B2b Market Authors:

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