Effects of Industrial Policy on Strategic Alliances for Research

Abstract

Previous literatures all recognize that research alliance (RA) can increase research efficiency, but do not decompose it into finer subcategory. Actually, different type of technical alliances can bring different type of research efficiency and even no forming alliance has advantages in some situations. In this paper we decompose research efficiencies into research competing efficiency, parallel research efficiency, technology expertise complementary efficiency and scale efficiency. According the content of research efficiency, we suggest four kind of industrial research configuration. The first is no RA formed, this configuration has highest research competing efficiency but without other kinds of efficiency. The second is two similar technology expertise firms forming alliance, this configuration has lower research competing efficiency but has parallel research efficiency. The third is two technology expertise complementary forming alliance, this configuration has lower research competing efficiency but has parallel research efficiency and expertise complementary efficiency. The fourth is all firms form a consortia, this configuration has no research competing efficiency but has other three kinds of research efficiency. Forming RA also involve high transaction costs, it include searching for best matched partners, negotiating organization detail of RA and the management of RA, and it is an obstacle to form RA Different kinds of RA has different types and degree of transaction cost. Failing to decompose research efficiency and transaction cost of forming RA make previous literature can not explain why some RAs are beneficial but no formed. The first objective of this paper is to find the specific context that make specific RA configuration to happen. This paper use industrial expected inventing time of new product as a proxy of dynamic efficiency. Then the second objective is to find what the RA realized is has highest dynamic efficiency. Government has advantage in reducing transaction cost of forming RA. So the third objective is to explain how government can utilize different policy to tackle different kind of transaction cost in order to help the RA with highest dynamic efficiency to form.