R&D cooperation, proximity and distribution of public funding between public and private research sectors

Marie-Laure Cabon-Dhersin (1) , Romain Gibert (1)

1 CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation

In this paper, we compare the distributions of socially optimal public funding between private and public research sectors in cooperative and non-cooperative R&D settings in the presence of externalities. We show that the proportion of public funding allocated to the private sector research always increases with the level of inter-firm spillovers but decreases with the concentration of the industry. This share is smaller (larger) when firms cooperate in R&D than when they do not for high (low) spillovers. Moreover, increases in public knowledge externalities to the private sector due to a closer proximity between the two research sectors increase the share allocated to the public sector regardless of whether firms cooperate or not in R&D.

Mots clés: Oligopoly; R&D Cooperation; Spillovers; Knowledge public exter-nalities; public and private research; proximity; Public policy

Domaines: Economies et finances; Économie et finance quantitative [q-fin]; Pricing [q-fin.PR]

Marie-Laure Cabon-Dhersin, Romain Gibert. R&D cooperation, proximity and distribution of public funding between public and private research sectors. Manchester School, 2020, ⟨10.1111/manc.12340⟩. ⟨hal-02006489⟩