Strategic Alliances: Opportunities for Innovation and Effects for Competition

Abstract

The study is dedicated to answering the question of what effects, related to which factors, should be taken into account when evaluating the integral effect of a strategic alliance in a knowledge-intensive industry for competition. Features of R & D can significantly affect the public reaction to the desire of companies to cooperate - even if the intended merger will lead to monopolization of the market. Although the problem of the influence of alliances on competition is widely covered, there are quite a few works exploring the impact of cooperation between companies in the field of research and development on social welfare in general. An original model was proposed, based both on the standard prerequisites for such work and on the prerequisites that were rarely included in the models devoted to strategic alliances: the conclusion of a contract for the development of a specific project and the launch of a new product on the market, the asymmetry of investment processes in companies, the possibility of reaching the market at once two solutions.Using my model, I found out that there are hypothetically such circumstances in which a strategic alliance, even if it leads to collusion, can increase social welfare and be desirable for society.