This study looks at how giving money for research and development (R&D) to companies in a market with two main players can affect their competition. When both companies get the same R&D subsidy, the one that outsources supplies to its rival tends to invest more in R&D and gain more market share and profits. This means that the subsidy policy can shift profits from the company that makes its own supplies to the one that buys from its competitor. So, when deciding on R&D subsidies in a market where companies outsource to each other, it's important to consider how it will impact the competition.