Hsieh, \.S., König, \MichaelD.\ and Liu, X. (2025). Endogenous Technology Spillovers in R\&D Collaboration Networks RAND Journal of Economics, :.
-
Affiliated author
-
Publication year2025
-
JournalRAND Journal of Economics
We introduce an R\&D network formation model where firms choose both R\&D efforts and collaboration partners. Neighbors in the network benefit from each other's R\&D through technology spillovers, and there exists competition effects reflecting strategic substitutability in R\&D. We provide a complete equilibrium characterization, and develop an estimation method that is computationally feasible for large networks. We then conduct an analysis of R\&D collaboration subsidies, and find that a subsidy scheme targeting specific R\&D collaborations can be more effective than a uniform subsidy, with a welfare gain up to five times larger than the cost of the subsidy.