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In a Research Joint Venture (RJV) firms undertake joint research and coordinate their research strategies. To date most contributions in the industrial organisation literature neglect the question of research coordination in their models of RJVs. In this thesis I model the coordination of research strategies, the sharing of technologies and investment in R&D by RJVs and non-cooperating firms. I undertake an explicit welfare evaluation of the allocation of resources to research by RJVs and non-cooperating firms. I show that firms in RJVs often coordinate research more effectively than firms that do not cooperate. I employ formal models which are supplemented with simulations whenever analytical results are not obtainable. In the introductory chapter I review the welfare analysis of innovation and RJVs in the industrial organisation literature. I show that this literature has often employed misleading measures of welfare. Finally I introduce and discuss the modelling approach pursued throughout the thesis. In the second chapter I model the behaviour of firms that are able to differentiate their research strategies. I show that firms do not always choose to differentiate their research strategies maximally. I show that RJV formation reduces welfare, whereas RJVs that are provided with an R & D subsidy improve welfare. I undertake a simulation of the model to quantify the welfare effects identified. In the third chapter I explore the welfare implications of costly absorptive capacity when modelling RJVs. I show how the cost of maintaining absorptive capacity gives rise to new welfare losses. I show that firms in RJVs invest in absorptive capacity more efficiently than non-cooperative firms. In the fourth chapter I model the coordination of R and D when firms pursue identical research paths and coordinate the number of research facilities operated. I model variations in the competitiveness of product markets and show how this allows clear welfare predictions to be drawn. I simulate the model in order to illustrate the analysis and quantify the welfare losses.