The Design of Vertical R&D Collaborations

Bibliographic Data

ID9725708
AuthorsPatrick Herbst (0000-0003-2916-7456, University of Stirling), Uwe Walz (0000-0003-4287-3486, Goethe University Frankfurt)
Year2017
Volume84
Issue333
Pages54-77
Publication date2017-01-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/ecca.12183
OpenAlexW1482222759
LanguageEN
Citations received1
References cited41

Suppliers play a major role in firms' innovation processes. We analyse ownership and technology choices in vertical R&D collaborations. Under non‐contractible R&D outcomes, trade‐offs arise between R&D specifically designed towards a manufacturer (increasing investment productivity) and a general technology (hold‐up reduction). Stronger downstream competition shifts optimal ownership towards the supplier and favours contracting over ownership rather than specific performance contracts. Downstream ownership is combined with the specific technology if the supplier's expertise is more pronounced or the specific technology is more productive. Contracts incorporating exit clauses increase the gains from collaborations

Business · Competition (biology) · Contractible space · Downstream (manufacturing) · Economics · Industrial organization · Investment (military) · Microeconomics · Productivity · Vertical Integration · Corporate Finance and Governance · Innovation Policy and RD · Intellectual Property and Patents · Marketing