Séminaire KTO-GREDEG-OFCE - Thomas Grebel (TU Ilmenau, Germany)

"Technological Spillovers, Product Market Rivalry, and R&D Investment: Theory and Evidence"


11-01-2018
Publication : 11-01-2018
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Séminaire KTO-GREDEG-OFCE Thomas Grebel (TU Ilmenau, Germany)
joint work with Lionel Nesta (OFCE, SKEMA, GREDEG)

"Technological Spillovers, Product Market Rivalry and R&D Investment: Theory and Evidence"

Abstract: We investigate the determinants of the sign of R&D reaction functions of two rival firms. Using a two-stage Cournot competition game, we show that this sign depends on four types of environments in terms of product rivalry and technology spillovers. We test the predictions of the model on the world's largest manufacturing corporations. Assuming that firms make R&D investments based on the R&D eort of the representative rival company, we develop a dynamic panel data model that accounts for the endogeneity of the decision of the rival rm. Empirical results corroborate the validity of the theoretical model.


GREDEG Working Paper No. 2017-34