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International R&D tournaments and Industrial Policy

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  • Zhou, Haiwen

Abstract

This paper provides a unified approach to study the influence of uncertainty and spillovers on the direction of R&D policy when firms engage in international R&D competition. When the reward to the winner is exogenously given, it is shown that whether a government will tax or subsidize its firm is sensitive to the type of uncertainty that characterizes the R&D process. When the reward to the winner is endogenously determined by R&D spending, the direction of optimal policy is not only sensitive to the type of uncertainty, but also sensitive to the degree of spillovers.

Suggested Citation

  • Zhou, Haiwen, 2007. "International R&D tournaments and Industrial Policy," MPRA Paper 75199, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:75199
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    References listed on IDEAS

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    More about this item

    Keywords

    International R&D tournaments; Industrial policy; uncertainty; spillovers;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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