Study on the Innovation Integration-Model of Vertical RJVs under the Industry Value Chain

There is a value chain in the enterprise and between enterprises. Under the industry value chain, this paper advocates to integrate the loosely R&D resources of the upstream and downstream enterprises with the establishment of research joint ventures (RJVs). By building mathematical model, the paper analyzes three different kinds of benefits: the upstream enterprise without R&D, the upstream enterprise with an independent R&D and the vertical RJVs between the upstream and downstream enterprises. It points out two important factors to affect the profit of RJVS, the decline in the marginal cost and the number of cooperative downstream enterprises. And the intrinsic motivation of the downstream enterprises to participate in the vertical RJVs is also described.