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Cooperative R&D and Strategic Trade Policy

Julie DeCourcy
The Canadian Journal of Economics / Revue canadienne d'Economique
Vol. 38, No. 2 (May, 2005), pp. 546-573
Published by: Wiley on behalf of the Canadian Economics Association
Stable URL: http://www.jstor.org/stable/3696046
Page Count: 28
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Cooperative R&D; and Strategic Trade Policy
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Abstract

In this paper three different cooperative R&D arrangements in a strategic trade policy model are examined. A policy game between two governments is analysed, where each government chooses a particular cooperative R&D policy in order to maximize national welfare. Allowing cooperation in R&D is also compared with the use of R&D subsidies. It is jointly optimal for both governments to allow their firms to participate in the same type of cooperative R&D, and allowing cooperation in R&D can be superior to the use of R&D subsidies.

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