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Constantine Manasakis, * Department of Political Science, University of Crete, Düsseldorf Institute for Competition Economics (DICE), Heinrich-Heine Universität Düsseldorf; E-mail [email protected] ; corresponding author
Emmanuel Petrakis, [dagger] Department of Economics, University of Crete, University Campus at Gallos, Rethymnon 74100, Greece; E-mail [email protected]
Vasileios Zikos[double dagger], [double dagger] Research Institute for Policy Evaluation and Design, University of the Thai Chamber of Commerce, 126/1 Vibhavadee-Rangsit Road, Dindaeng, Bangkok, 10400, Thailand; E-mail [email protected]
[Acknowledgment]
We would like to thank the editor and two anonymous referees for their useful comments and suggestions. We also thank Christian Wey, Yannis Caloghirou, Chrysovalantou Milliou, the participants at the Second CEPR School on Applied IO at Munich and the 4th Conference on Research on Economic Theory and Econometrics at Syros, Greece. Part of this work was supported by the COST Action IS1104 "The EU in the new economic complex geography: models, tools and policy evaluation." Manasakis acknowledges the financial support from the European Commission through the Marie Curie Actions of its Sixth Framework Programme (MSCF-2004-013342) and hospitality at the Duesseldorf Institute for Competition Economics (DICE, Heinrich-Heine University), where part of this work was completed while he was on a research visit there.
1. Introduction
The crucial role of business expenditures in Research and Development (R&D) investments for the competitiveness and growth of firms and national economies has by far been established by business practitioners, policy makers, and academics (OECD 2010).
In this context, evidence across the United States (Hagedoorn 2002), Europe (Caloghirou and Vonortas 2004), and Japan (Branstetter and Sakakibara 1998) suggests that during the last three decades firms have tended to undertake their R&D investments under Research Joint Ventures (RJVs).1,2 At the same time, the promotion of RJVs is a top priority in the technology policy agenda of industrialized countries (Protogerou, Caloghirou, and Siokas 2010).3
Interestingly, RJVs are usually formed at the downstream tier of vertically related industries, where final-good producers participating in RJVs purchase their inputs from upstream suppliers with market power (downstream RJVs; Duso, Röller, and Seldeslachts 2013).4 Yet, the organization of vertical relations differs across countries and industries. For instance, Dyer and Ouchi (1993) document that the exclusive vertical relationships between RJV-participating Japanese automakers and their input suppliers are responsible for...