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International Journal of Business and Economics

International Journal of Business and Economics
Volume 10, No. 1

April, 2011
 
R&D Cost Sharing along the Supply Chain
 
Mark R. Frascatore
Faculty of Economics and Financial Studies, Clarkson University, U.S.A.
 
Abstract
A model of R&D cost sharing between a manufacturer and its component supplier is examined. The manufacturer can pay for a fraction of the supplier's cost-reducing R&D in return for a lower component price, and both firms can improve profits.
 
Keywords:R&D cooperation, supply chain collaboration, research joint ventures.
 
JEL Classifications:L14, L24.
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