Munich Personal RePEc Archive

Competition and innovation with horizontal R&D spillovers

Khazabi, Massoud and Quyen, Nguyen (2008): Competition and innovation with horizontal R&D spillovers.

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Abstract

The paper extends a theoretical framework for analyzing competition and innovation in presence of horizontal spillovers. Introducing two scenarios, it is shown that when firms behave non-cooperatively in both the R&D and production stages the degree of spillover has a negative relationship with the effective and respective R&D expenditures of each firm as well as the level of social welfare. When firms behave cooperatively in the R&D stage, and non-cooperatively in the production stage the relationship between the R&D expenditure of the joint research lab and the number of firms in the market is negative.

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