Recently, joint R&D involving horizontal collaboration among three or more competing firms has emerged in a variety of industrial sectors. This article views the evolution of the R&D collaborative as an innovative and efficient institutional form for the development of "leaky" intellectual property. The authors argue that private firms underinvest in the development of "leaky" intellectual property due to difficulties in appropriability. Three U.S. case histories and one Japanese example of horizontal R&D collaboration illustrate differences in organizational design, goal formation, and management. The authors conclude that an insufficiency of institutional support for U.S. collaboratives may lead to underinvestment in "leaky" technologies.
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