Essays on preference conditions for cooperative R＆D: Critical evaluation of R＆D environments

Abstract

This dissertation examines firms`` incentive for cooperative R\&D, by incorporating basic nature of technology and new feature of the markets of high-tech information technology. Specifically, we consider the impact of the following three factors of technology and markets on the incentives for research cooperation; the race aspect of R&D competition, the learning process under technological uncertainty, and the advantage of research joint ventures to set industry standard in network industries. Our first focus is on the issue of incentives for RJVs which a firm has when the time of technology development is regarded as more important than technological development itself. If technological competition is assumed to be a race, the most important thing for a firm is to arrive at the point of destination earlier than other rival firms. In this case, the economic profits that a firm earns from the success of cooperative R&D are greatly reduced, since they are shared by the firm and the rival firms. We have examined, as the second issue, firms`` incentive for cooperative R&D in the presence of technological uncertainty. The examination shows that, in case of imperfect information on the difficulty of innovation itself, firms may heighten profitability by placing the purpose of cooperative R&D at the sharing of information. In other words, in the presence of technological uncertainty, firms should focus on the exchange of technological information rather than on the sharing of the R&D cost or on multiple investment. Meanwhile, the comparison of the profitabilities of independent R&D and the information-sharing type of cooperative R&D shows that the adoption of cooperative R&D has private rationality, in case interest rate is relatively high. The increase of interest rate which means the increase of the discount rate of the future value ultimately makes it impossible for firms to conduct technology development for a long time. Hence, in this case, firms`` rational ch...