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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