Journal
INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION
Volume 36, Issue -, Pages 22-35Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.ijindorg.2014.05.004
Keywords
Patent; Essential patent; Standard; ICT; Consortia; Innovation
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The development of formal ICT standards is a challenging form of collaborative innovation, combining consensus decision making and R&D rivalry. To supplement this formal standard setting process, it has thus become frequent that part of the involved firms creates ad hoc consortia to better align positions on a common technology roadmap. This paper aims to assess whether such consortia can effectively mitigate R&D coordination failure through enhanced cooperation. We first develop a theoretical model showing that depending on the nature of firms' incentives to contribute proprietary technology, different types of R&D coordination failure - namely a Public Good or Rent Seeking problem - may occur in equilibrium. Using a large panel of standards, we then confirm empirically the prediction that consortia have different effects on innovation under a Public Good or Rent Seeking regime. Overall, we observe an increase in innovation after a firm joined a consortium. However, this effect is significantly weakened or even reversed for standards characterized by a strong Rent Seeking regime. (C) 2014 Elsevier B.V. All rights reserved.
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