The role of public agricultural R&D is analyzed in a mixed oligopoly model framework with strategic interaction among innovating firms and the government. Selective subsidization of innovating firms (i.e., targeted subsidies) is also examined. Analytical results show that the existence of public applied research can enhance the arrival rate of innovations while mitigating the socially undesirable consequences of market power in applied R&D production. Under certain conditions, direct government involvement in applied R&D is equivalent to the provision of targeted subsidies to less efficient firms.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2001 Annual meeting, August 5-8, Chicago, IL with number
20699.
Length: Date of creation: 2001 Date of revision: Handle: RePEc:ags:aaea01:20699
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