Hsieh, C.S., König, MichaelD. and Liu, X. (2025). Endogenous Technology Spillovers in R&D Collaboration Networks RAND Journal of Economics, 56(4):419--443.
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Affiliated author
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Publication year2025
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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.