On the Antitrust Treatment of Production Joint Ventures

This paper provides some first empirical evidence on the relationship between R&D spillovers and R&D cooperation. The results suggest disentangling different aspects of know-how flows. Firms which rate incoming spillovers more importantly and who can limit outgoing spillovers by a more effective protection of know-how, are more likely to cooperate in R&D. Our analysis also finds that cooperating firms have higher incoming spillovers and higher protection of know-how, indicating that cooperation may serve as a vehicle to manage information flows. Our results thus suggest that on the one hand the information sharing and coordination aspects of incoming spillovers are crucial in understanding cooperation, while on the other hand, protection against outgoing spillovers is important for firms to engage in stable cooperative agreements by reducing free-rider problems. Distinguishing different types of cooperative partners reveals that while managing outgoing spillovers is less critical in alliances with non-commercial research partners than between vertically related partners, the incoming spillovers seem to be more critical in understanding the former type of R&D cooperation.JEL: D21, L13, O31, O32.

Section: Industrial Organization Results On Randd Cooperation and Spillmentioning

confidence: 99%

Section: Industrial Organization Results On Randd Cooperation and Spillmentioning

confidence: 99%

R&D Cooperation and Spillovers: Some Empirical Evidence

Cassiman

Veugelers

1999

“…Collaborating firms may transmit not only codified but also tacit knowledge to the partner so that leakage risks go beyond the joint project (Hottenrott and Lopes-Bento 2014b). Indeed, partnerships bear the inherent risk of freeriding, where one associate tries to absorb the maximum knowledge from the other while concealing its own efforts (see e.g., Shapiro and Willig 1990;Baumol 1993;Kesteloot and Veugelers 1995). For example, partnerships with a substantial overlap in core businesses, geographic markets, and functional skills have a success rate of approximately only 30% as competitors are inclined to maximize their own individual objectives rather than the partnership's interests (Lokshin et al 2011).…”

Section: Pains From Collaborationmentioning

confidence: 99%

R&D Partnerships and Innovation Performance: Can There Be Too Much of a Good Thing?

Hottenrott

Lopes-Bento

2014

R&D collaboration facilitates the pooling of complementary skills, learning from the partner as well as the sharing of risks and costs. Research therefore repeatedly stresses the positive relationship between collaborative R&D and innovation performance. Fewer studies address the potential drawbacks of collaborative R&D. Collaborative R&D comes at the cost of coordination and monitoring, requires knowledge disclosure and involves the risk of opportunistic behavior by the partners. Thus, while for lower collaboration intensities the net gains can be high, costs may start to outweigh benefits if firms perform a higher share of their innovation projects collaboratively. For a sample of 2,735 firms located in Germany and active in a broad range of manufacturing and service sectors, this study finds that increasing the share of collaborative R&D projects in total R&D projects is associated with a higher probability of product innovation and with a higher market success of new products. While this confirms previous findings on the gains for innovation performance, we also observe that collaboration has decreasing and even negative returns on product innovation if its intensity increases above a certain threshold. Thus, the relationship between collaboration intensity and innovation follows an inverted-U shape and, on average, costs start to outweigh benefits if a firm pursues more than about two-thirds of its R&D projects in collaboration. This result is robust to conditioning market success to the introduction of new products and to accounting for the selection into collaborating. This threshold is, however, contingent on firm characteristics. Smaller and younger as well as resource constrained firms benefit from relatively higher collaboration intensities. For firms with higher collaboration complexities in terms of different partners and different stages of the R&D process at which collaboration takes place, returns start to decrease already at lower collaboration intensities.

“…For example, when partners' goals differ, joint ventures may exacerbate the situation and hurt rather than help the parties involved. Also, Shapiro and Willig (1990) point to the potential for free riding by the venture partners as another possible problem associated with joint ventures.…”

Section: Balancing Competition and Cooperation In Joint Venturesmentioning

confidence: 99%

Balancing Competition and Cooperation: Evidence from Transatlantic Airline Markets

Bilotkach¹,

Hüschelrath

2015

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. BALANCING COMPETITION AND COOPERATION: EVIDENCE FROM TRANSATLANTIC AIRLINE MARKETS Volodymyr Bilotkach and Kai Hüschelrath  August 2015 AbstractIn the last two decades, airline alliances were not only successful in extending the size of their networks, but also received approvals by public authorities to intensify their cooperation through to merger-like revenue-sharing joint ventures (JVs). We empirically investigate the impact of the implementation of such joint ventures on both the respective airlines' competitive strategies as well as productive efficiency. Using U.S. DOT T100 International Segment data and applying airline-market fixed effects models, we find that joint ventures -compared to services with a lower degree of cooperation -lead to a 3-5 percent increase in capacity between the respective partner airlines' hub airports; however, this is done at the expense of services elsewhere in the network. Productive efficiency, as measured by load factors, is found to be 0.5-5 percent lower for joint venture routes compared to routes operated under antitrust immunity only. We use our empirical results to discuss implications for the balancing of competition and cooperation in transatlantic airline markets.