Discussion paper

DP13533 Do Research Joint Ventures Serve a Collusive Function?

Every year thousands of firms are engaged in research joint ventures (RJV), where knowledge gained through R&D is shared among members. Many members are rivals leaving open the possibility that firms form RJVs to facilitate product collusion. We exploit variation in RJV formation generated by a policy change that affects the collusive benefits but not the research synergies of a RJV. Estimates from our RJV participation equation indicate participation is impacted by the policy change. The magnitude is significant with an average drop in the probability of joining of 30%. Our results are consistent with RJVs serving a collusive function.

£6.00
Citation

Sovinsky, M and E Helland (2019), ‘DP13533 Do Research Joint Ventures Serve a Collusive Function?‘, CEPR Discussion Paper No. 13533. CEPR Press, Paris & London. https://cepr.org/publications/dp13533