TECHNOLOGICAL COOPERATIVE AGREEMENTS AND FIRMS RESEARCH-AND-DEVELOPMENT INTENSITY - A NOTE ON CAUSALITY RELATIONS

In this paper we apply a recently proposed model of vector autoregress ion for panel data to analyse the Granger causality relationship betwe en a firm's intramural R&D intensity and technological cooperative agr eements. The analysis relies on a sample composed of 95 major US, Euro pean and Japanese firms in the semiconductor, data processing and tele communications industries observed during the period 1980-86. Decision s on interfirm technological collaborations are shown to cause a la Gr anger decisions on internal R&D investments and vice versa. We thus su ggest that, in contrast with the methodological approaches followed by previous empirical works, firms' decisions concerning both intramural innovative effort and technological cooperation are endogenous and ha ve to be jointly studied through a simultaneous two-equation structura l model.