Chapter
1. INTRODUCTION
In pursuit of its legislative
mandate to strengthen the competitiveness of technology-intensive
U.S. firms and industries for future economic growth, the Department
of Commerce’s Advanced Technology Program (ATP) supports research
consortia to promote “pre-commercial” research by private
firms. A number of theoretical arguments in the economic literature
support the use of this policy instrument. Spence’s (1984) pioneering
work analyzed the possible benefits of research consortia as tools
by which R&D externalities could be internalized. Subsequent
contributions include Katz (1986), d’Aspremont and Jacquemin
(1988), Suzumura (1992), Kamien, Muller, and Zang (1992), Kamien
and Zang (2000), Leahy and Neary (1997), and Katsoulacos and Ulph
(1998).1 Much of this theoretical literature identifies
the conditions under which consortia are likely to lead to improvements
that benefit the economy. However, little has been done to confront
the empirical predictions or implications of this literature with
data in a systematic way.2
This study empirically
evaluates the impact of ATP-funded consortia3 on the research
productivity of participating firms by building upon our earlier
work (Branstetter and Sakakibara, 1998, 2000) where we examine the
impact of Japanese government–sponsored research consortia.
We analyze the ATP-funded research consortia at three different levels
of aggregation—the impact of consortia participation on the
overall research productivity of the participating firm, the impact
of participation at the consortium level, and at the level of the
firm-consortium pair—in an attempt to extract as much useful
information as possible from our quantitative data set.
We find that there
is a positive association between the participation in research consortia
and research productivity of the participating firms at all levels
of aggregation. Furthermore, we find that this positive impact of
consortia is higher when the average technological proximity (the
degree to which the patenting portfolios of participating firms are
similar) of participating firms is high. We find less clear-cut evidence
concerning which kinds of firms benefit most from participation.
However, our results demonstrate that participation in ATP-funded
research consortia leads to verifiable and measurable increases in
research productivity of the participating firms.
The rest of the study
is organized as follows: Section 2 provides
background information on this study. Section
3 describes our approach to estimate the overall impact of consortia
participation and presents the results. Section
4 examines the relationship between consortium characteristics
and consortium outcomes. Section 5 presents
results relating the characteristics of participating firms to the
benefits those firms receive from participation. Section
6 presents findings from Japanese data on government-sponsored
research consortia. Section 7 offers some
conclusions and suggests issues for future research.
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