Research on Impact of the Spillover to Vertical RJVs

Considering a relatively complex market structure composed of two upstream firms and some downstream firms under spillover,this paper studys the the impact of spillover on vertical RD cooperation. The result shows that,although the spillover enables consumers to benefit from the RD cooperation,it reduces market share and cost advantage of the downstream firms joining vertical RJVs and makes upstream firms tend toprovide intermediate products for the other downstream firms,which is adverse to the stability of vertical RJVs. More over,the spillover does not affect the optimal scale chioce of upstream firms joining vertical RJVs,but the optimal Scale chioce of downstream firms joining vertical RJVs increases with increasing spillover.