Ambiguity attitude, R&D investments and economic growth
AbstractThe process aimed at discovering new ideas is an economic activity whose returns are intrinsically uncertain. In a standard neo-Schumpeterian growth framework we assume that, when deciding upon R&D efforts, economic agents hold âambiguous beliefsâ about the exact probability of arrival of the next vertical innovations, and face ambiguity via the Î±-MEU decision rule (Ghirardato et al. (2004)). Along the steady-state equilibrium the higher the agentsâ ambiguity aversion (Î±), the lower the R&D efforts and, coeteris paribus, the overall economic performance. Consistently with a cross-country empirical evidence, this causal mechanism suggests that, together with the profitability conditions of the economy, different âculturalâ attitudes towards ambiguity may contribute to explain the different R&D intensities observed across countries.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Evolutionary Economics.
Volume (Year): 21 (2011)
Issue (Month): 2 (May)
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Web page: http://link.springer.de/link/service/journals/00191/index.htm
Other versions of this item:
- Guido Cozzi & Paolo E. Giordani, . "Ambiguity Attitude, R&D Investments and Economic Growth," Working Papers 2008_06, Business School - Economics, University of Glasgow.
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- Z1 - Other Special Topics - - Cultural Economics
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