COOPERATIVE RESEARCH-AND-DEVELOPMENT AND THE VALUE OF THE FIRM

In this paper, we investigate the stock price responses of listed firm s in the U.S. markets to announcements of R&D collaborations. We find that abnormal returns of stocks are significantly positive after R&D c ollaborations are announced. The positive stock price response towards the R&D cooperation initiations can be partially explained by the nat ure of the collaborations and the characteristics of the participating firms. We also find that the stock prices of rival firms respond nega tively to announcements of R&D cooperation. This result seems to suppo rt the hypothesis that cooperative R&D improves economic efficiency of the cooperative firms that gain competitive advantage. We do not find evidence supporting the hypothesis that R&D cooperation creates collu sive, anticompetitive effects in the product market.