Competition and private R&D investment.

Competition and private R&D investment.

We investigate the determinants of the sign of Research and Development reaction functions of rival firms. Using a two-stage n-firm Cournot competition game, we show that this sign depends on four types of environments in terms of product rivalry and technology spillovers. We test the predictions of...

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Main Authors: Thomas Grebel, Lionel Nesta
Format: Article
Language:English
Published: Public Library of Science (PLoS) 2020-01-01
Series:PLoS ONE
Online Access:https://doi.org/10.1371/journal.pone.0232119
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spelling doaj-bca5a3019da54408a0f8ce3b9cd92d832021-03-03T21:44:55ZengPublic Library of Science (PLoS)PLoS ONE1932-62032020-01-01155e023211910.1371/journal.pone.0232119Competition and private R&D investment.Thomas GrebelLionel NestaWe investigate the determinants of the sign of Research and Development reaction functions of rival firms. Using a two-stage n-firm Cournot competition game, we show that this sign depends on four types of environments in terms of product rivalry and technology spillovers. We test the predictions of the model on the world's largest manufacturing corporations. Assuming that firms make R&D investments based on the R&D effort of the representative rival company, we develop a dynamic panel data model that accounts for the endogeneity of the decision of the rival firm. Empirical results thoroughly corroborate the validity of the theoretical model.https://doi.org/10.1371/journal.pone.0232119
collection DOAJ
language English
format Article
sources DOAJ
author Thomas Grebel
Lionel Nesta
spellingShingle Thomas Grebel
Lionel Nesta
Competition and private R&D investment.
PLoS ONE
author_facet Thomas Grebel
Lionel Nesta
author_sort Thomas Grebel
title Competition and private R&D investment.
title_short Competition and private R&D investment.
title_full Competition and private R&D investment.
title_fullStr Competition and private R&D investment.
title_full_unstemmed Competition and private R&D investment.
title_sort competition and private r&d investment.
publisher Public Library of Science (PLoS)
series PLoS ONE
issn 1932-6203
publishDate 2020-01-01
description We investigate the determinants of the sign of Research and Development reaction functions of rival firms. Using a two-stage n-firm Cournot competition game, we show that this sign depends on four types of environments in terms of product rivalry and technology spillovers. We test the predictions of the model on the world's largest manufacturing corporations. Assuming that firms make R&D investments based on the R&D effort of the representative rival company, we develop a dynamic panel data model that accounts for the endogeneity of the decision of the rival firm. Empirical results thoroughly corroborate the validity of the theoretical model.
url https://doi.org/10.1371/journal.pone.0232119
work_keys_str_mv AT thomasgrebel competitionandprivaterdinvestment
AT lionelnesta competitionandprivaterdinvestment
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