Research Policy and Endogenous Growth

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Research Policy and Endogenous Growth

Author Info

Maria Fuensanta Morales ()

Abstract

This paper studies the effects of different types of research policy on economic growth. We find that while tax incentives to private research, public funding of private projects, and basic research performed at public institutions have unambiguously positive effects on economic growth, performing applied research at public institutions could have negative growth effects. This is due to the large crowding out of private research caused by public R\&D when it competes with private firms in the "patent race". Concerning the effects of these policies on welfare, it is found that research policy can either improve or reduce consumer welfare depending on the characteristics of the policy and that an excessively high research subsidy will reduce it.

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Publisher Info
Paper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 488.01.

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Length: 43
Date of creation: 17 May 2001
Date of revision:
Handle: RePEc:aub:autbar:488.01

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Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2001-11-27 (All new papers)
NEP-DEV-2001-11-27 (Development)
NEP-ENT-2001-11-27 (Entrepreneurship)
NEP-NET-2001-11-27 (Network Economics)
NEP-TID-2001-11-27 (Technology & Industrial Dynamics)

References listed on IDEAS
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Alessandra Pelloni, 1997. "Public Financing of Education and Research in a Model of Endogenous Growth," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 11(3), pages 517-539, November. [Downloadable!] (restricted)
David, Paul A. & Hall, Bronwyn H. & Toole, Andrew A., 2000. "Is public R&D a complement or substitute for private R&D? A review of the econometric evidence," Research Policy, Elsevier, vol. 29(4-5), pages 497-529, April. [Downloadable!] (restricted)
Other versions:
- Paul A. David & Bronwyn H. Hall & Andrew A. Toole, 1999. "Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence," NBER Working Papers 7373, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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- Paul A. David & Bronwyn H. Hall & Andrew A. Toole, 2005. "Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence," Development and Comp Systems 0502011, EconWPA. [Downloadable!]
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Other versions:
- David Pérez-Castrillo & Bruno Cassiman & Reinhilde Veugelers, 2000. "Endogeneizing know-how flows through the nature of R&D investments," UFAE and IAE Working Papers 464.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
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Other versions:
- Paul A. David & Bronwyn H. Hall, 2001. "Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box," Public Economics 0012001, EconWPA. [Downloadable!]
- Paul A. David and Bronwyn H. Hall., 2000. "Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box," Economics Working Papers E00-275, University of California at Berkeley. [Downloadable!]
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Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," NBER Working Papers 3099, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Grossman, G.M. & Helpman, E., 1989. "Quality Ledders In The Theory Of Growth," Papers 148, Princeton, Woodrow Wilson School - Public and International Affairs.
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Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
Other versions:
- Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
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Other versions:
- Theofanis P. Mamuneas & M. Ishaq Nadiri, 1997. "Public R&D Policies and Cost Behavior of the US Manufacturing Industries," NBER Working Papers 5059, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Gerhard Glomm & B. Ravikumar, 1994. "Growth-Inequality Trade-Offs in a Model with Public Sector R&D," Canadian Journal of Economics, Canadian Economics Association, vol. 27(2), pages 484-93, May. [Downloadable!] (restricted)
Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August. [Downloadable!] (restricted)
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Howitt, Peter & Aghion, Philippe, 1998. " Capital Accumulation and Innovation as Complementary Factors in Long-Run Growth," Journal of Economic Growth, Springer, vol. 3(2), pages 111-30, June. [Downloadable!] (restricted)
Park, Walter G., 1998. "A theoretical model of government research and growth," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 69-85, January. [Downloadable!] (restricted)
Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
Other versions:
- Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)

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