1998 Reports

Knowledge sharing in cooperative research and development

Sakakibara, Mariko

This article examines the effects of knowledge sharing or endogenous spillovers among R&D consortia participants on R&D competition when R&D enhances a firm's absorptive capacity. A game-theoretic model illustrates how different compositions of R&D consortia affect spillovers and R&D spending of participants. When a firm participates in a consortium whose members are from diverse industries, the model suggests that this participation increases spillover rates among participants and intensifies firms' R&D efforts to learn from other members in the consortium. An econometric analysis based on the panel data of 267 Japanese firms over 13 years shows evidence of this learning effect.