%0 Journal Article %A Edwards, Huw %A Ferrett, Ben %A Gravino, D. %D 2019 %T Inter-firm R&D collaboration within and across national borders %U https://repository.lboro.ac.uk/articles/journal_contribution/Inter-firm_R_D_collaboration_within_and_across_national_borders/9491300 %2 https://repository.lboro.ac.uk/ndownloader/files/20078843 %K R&D collaboration %K RJV %K Spatial competition %K Country size %K Trade costs %K Economics not elsewhere classified %X We set up a model to investigate the strategic aspect of a firm’s incentive to collaborate in cost-reducing R&D with either a local or a foreign partner. We argue that collaboration with a foreign firm is preferred to collaboration with a local firm if the extra profits generated by a foreign collaboration exceed the additional cost of coordinating collaboration across national borders. We show that foreign collaboration is more likely the bigger the home-market-size of the foreign firm and, given certain conditions, the higher the international trade cost. We also show that whenever a foreign collaboration arises in equilibrium, it is efficient (i.e. world-welfare-maximising); and that there are cases where: (i) a foreign collaboration would be efficient but a local collaboration emerges in equilibrium; and (ii) an efficient foreign collaboration emerges in equilibrium, but one of the countries would prefer a local collaboration. We briefly consider the policy implications of these findings. %I Loughborough University