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Journal of Economics

, Volume 96, Issue 3, pp 193–222 | Cite as

Effects of coordinated strategies on product and process R&D

  • Elena Cefis
  • Stephanie Rosenkranz
  • Utz Weitzel
Open Access
Article

Abstract

Using a game theoretical model on firms’ simultaneous investments in product and process R&D, we advance and empirically test hypotheses on the role of externalities on the optimal R&D portfolio of cooperating firms and independently competing firms. We use Community Innovation Survey data on 3,696 Italian manufacturing firms. In line with our model we find that members of a group of firms invest significantly more into product, process, and aggregate R&D than independent firms. Further, their R&D portfolios tend to show a higher product versus process ratio. However, with regard to R&D performance and efficiency we find that independent firms are superior.

Keywords

Coordination R&D Innovation Efficiency Cost reduction Product differentiation 

JEL Classification

C72 L1 L13 O32 

Notes

Acknowledgements

The authors wish to thank Rob Alessie, Karen Klomp, Hans Schenk, the participants at the ECIS seminar, Eindhoven University, March 2005, at the EARIE Conference, Porto, Portugal, 1–4 September 2005, and at the 2nd IASTED International Conference on Alliances, Mergers and Acquisitions, MIT, Cambridge, MA, USA, 8–10 November 2004, for helpful comments and suggestions. This work has been accomplished with the cooperation of the Italian Statistical Office (ISTAT) and in particular of Andrea Mancini and Roberto Monducci, whose collaboration made this work possible. The research has been supported by the University of Bergamo (Elena Cefis, grant ex 60% n.60CEFI07, Department of Economics)

Open Access

This article is distributed under the terms of the Creative Commons Attribution Noncommercial License which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.

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Copyright information

© The Author(s) 2008

Authors and Affiliations

  • Elena Cefis
    • 1
    • 2
  • Stephanie Rosenkranz
    • 2
    • 3
  • Utz Weitzel
    • 2
  1. 1.University of BergamoBergamoItaly
  2. 2.Utrecht School of EconomicsUtrecht UniversityUtrechtThe Netherlands
  3. 3.CEPRLondonUK

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