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Knowledge spillovers and the timing of R&D policy

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  • Geir H. Bjertnæs
  • Tom-Reiel Heggedal
  • Karl Jacobsen

Abstract

In this paper we analyze how knowledge spillovers influence the optimal timing of R&D policy. We find that the optimal R&D subsidy profile may be falling, increasing or constant. The time profile of the subsidy rates is crucially dependent on the elasticity of scale in R&D production, i.e. the spillover parameter plus labor elasticity, and the sign of the optimal growth rate of the knowledge stock. Constant subsidy rates are only optimal in knife edge cases. The problems are solved using both an analytical framework and numerical simulations.

Suggested Citation

  • Geir H. Bjertnæs & Tom-Reiel Heggedal & Karl Jacobsen, 2009. "Knowledge spillovers and the timing of R&D policy," DEGIT Conference Papers c014_042, DEGIT, Dynamics, Economic Growth, and International Trade.
    • Handle: RePEc:deg:conpap:c014_042
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    4. Heggedal, Tom-Reiel & Jacobsen, Karl, 2011. "Timing of innovation policies when carbon emissions are restricted: An applied general equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 33(4), pages 913-937.
    5. Klette, Tor Jakob & Moen, Jarle & Griliches, Zvi, 2000. "Do subsidies to commercial R&D reduce market failures? Microeconometric evaluation studies1," Research Policy, Elsevier, vol. 29(4-5), pages 471-495, April.
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    Cited by:

    1. Argentino Pessoa, 2005. "“Ideas” driven growth: the OECD evidence," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 4(1), pages 46-67, April.

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    More about this item

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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