Government investment in university research results in greater output and impact. To better capture economic benefits stemming from university research, governments have developed funding programs specifically targeting university-industry collaboration. However, little is known about the...

We reconsider the justifications of R&D subsidies by Spencer and Brander (1983) and others by allowing firms to pool R&D investments and license innovations. In equilibrium R&D joint ventures are formed and licensing occurs in a way that eliminates the strategic benefits of R&D investment in the...