When Spillovers Enhance R&D Incentives

Authors

Rittwik Chatterjee, Centre for Studies in Social Sciences Calcutta
Srobonti Chattopadhyay, Vidyasagar College
Tarun Kabiraj, Indian Statistical Institute, Kolkata

Article Type

Research Article

Publication Title

Journal of Quantitative Economics

Abstract

It is commonly believed that spillover reduces R&D incentives of a firm. This happens because of the appropriability problem. However, some empirical literature shows the possibility of enhanced R&D incentives under spillovers. In the literature this is explained under incomplete information, but we show this theoretically under complete information. We show in particular that in a duopoly there are situations when with no spillovers only one firm invests in R&D, but under spillovers both the firms invest. This occurs when there is complementarity in research and the spillover rate lies in an interval specified by the size of R&D investment.

First Page

857

Last Page

868

DOI

10.1007/s40953-019-00161-3

Publication Date

12-1-2019

Comments

Open Access, Green

Recommended Citation

Chatterjee, Rittwik; Chattopadhyay, Srobonti; and Kabiraj, Tarun, "When Spillovers Enhance R&D Incentives" (2019). Journal Articles. 568.
https://digitalcommons.isical.ac.in/journal-articles/568