Abstract
In the United States, as in most industrialized nations, aggregate technological advancement declined during the 1970s and early 1980s. The U.S. Congress was quick to respond to this down turn by passing a number of technology- and innovation-related initiatives, one of which was the National Cooperative Research Act (NCRA) of 1984. It has been argued that this policy response is an example of government acting as entrepreneur because the enabling legislation was both innovative and characterized by entrepreneurial risk. In this paper we examine empirically covariates with the trend in the formation of research joint ventures (RJVs) promulgated by the NCRA and with the probability that a RJV will have an international research partner. We find that RJV formations seem to increase in times when industrial investments in research and development (R&D) decrease, and we conclude that RJVs might thus be a substitute for internal R&D activity. We also find that the probability of a RJV having an international research partner increases as the membership size of the RJV increases. We conclude that as membership size increases, the ability of any one member to appropriate the collective research contributions from the other members, and thus gain a competitive advantage, decreases. Thus, the cost of including in the RJV an international partner, which we argue could represent a potential intellectual capital leakage, decreases.
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Notes
Current organizations in the NRI joint venture include GlobalFoundaries, IBM, Intel, Micron Technology, and Texas Instruments. The mission of NRI is to: “Demonstrate non-conventional, low-energy technologies which can outperform CMOS [Complementary Metal–Oxide–Semiconductor technology] on critical applications in ten years and beyond.” <http://www.src.org/program/nri/about/mission/>
The National Cooperative Research and Production Act (NCRPA) of 1993, Public Law 103–42, amended the NCRA by extending the safe harbor to RJVs involved in production as well as in research. The NRCA was amended again in 2004 under the Standards Development Organization Advancement Act of 2004, Public Law 108–237, to encourage the activities of standards setting organizations and participating firms.
The CORE database was constructed and maintained by Link at the University of North Carolina at Greensboro through 2008 from support from the National Science Foundation (NSF). The CORE database was used to document for policy purposes the formation of RJVs through 2008, as summarized in the National Science Board’s Science and Engineering Indicators. Because the database was constructed from NSF’s support, it is publically available on request from the authors. The database was updated through 2012 to facilitate the analysis in this paper. Studies based on earlier versions of the CORE database include Link (1996, 2005) and Link and Scott (2005). See Vonortas (1997) for related empirical analyses based on Federal Register filing information.
The most recent data on industry funded R&D are for 2011.
In an alternative specification, the number of filings in 1994 and 1995 were numerically averaged and that average value replaced the 1994 datum and the 1995 datum. The model that underlies Table 2 was re-estimated with D 85 , and the estimated coefficient for it was positive and significant. The findings discussed below related to the other variables in the model are unchanged. These results are available from the authors on request.
The CORE database does not contain information relevant to an understanding of the strategic intent of including an international firm as a RJV member, but certainly this is an important area for future research.
We thank an anonymous referee for pointing out that horal hazard could accompany the decision to invite an international partner into a RJV and that adverse behavior could result. Unfortunately, information in the CORE database is insufficient to account for either the timing of the invitation to the international partner, their motivation for joining the RJV, or their behavior (or that of other members) after joining. This is certainly an important strategic issue for future consideration.
Baldwin and Link (1998) for university research partners and Leyden and Link (1999) for government research partners argue that such partners act as honest brokers when so involved. Thus, when so involved, there is more assurance that the research results will be shared and will not remain proprietary in the hands of any one partner.
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Allen, S.D., Link, A.N. U.S. research joint ventures with international partners. Int Entrep Manag J 11, 169–181 (2015). https://doi.org/10.1007/s11365-013-0281-4
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DOI: https://doi.org/10.1007/s11365-013-0281-4