Cooperation or non-cooperation in R&D: how should research be funded?

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

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

This article investigates two research funding policies in a cooperative and a non-cooperative R&D setting: subsidising private research (Spr) and subsidising public research (Spu). We show that R&D cooperation with subsidies (either Spr or Spu) always performs better than R&D cooperation with no subsidy. Furthermore, the Spr policy leads to better performance than the Spu approach does in terms of overall net surplus whether the rms cooperate or not in R&D. Nevertheless, comparing the two research funding policies for the same level of public spending shows that the Spu policy with R&D cooperation is in some cases more eective than the Spr policy, the latter becoming too costly for the government when spillovers are high.

Mots clés: R&D Cooperation; R&D spillovers; Knowledge public externalities; Subsidies; Public policy; H2; H4; L3; L5; 03; C7

Domaines: Économie et finance quantitative [q-fin]

Marie-Laure Cabon-Dhersin, Romain Gibert. Cooperation or non-cooperation in R&D: how should research be funded?. Economics of Innovation and New Technology, 2018, pp.1-22. ⟨10.1080/10438599.2018.1542775⟩. ⟨hal-02006515⟩