Back to Basics: Basic Research Spillovers, Innovation Policy and Growth
AbstractThis paper introduces endogenous technical change through basic and applied research in a growth model. Basic research differs from applied research in two significant ways. First, significant advances in technological knowledge come through basic research rather than applied research. Second, these significant advances could potentially be applicable to multiple industries. Since these applications are not immediate, the innovating firm cannot exploit all the benefits of the basic innovations for production. We analyze the impact of this appropriability problem on firmsÃƒÂ¢Ã‚Ã‚ basic research incentives in an endogenous growth framework with private firms and an academic sector. After characterizing the equilibrium, we estimate our model using micro level data on research expenditures and behavior by French firms. We then decompose the aggregate growth by the source and type of innovation. Moreover, we quantitatively document the size of the underinvestment in basic research and consider various research policies to alleviate this inefficiency. Our analysis highlights the need for devoting a larger fraction of GDP for basic academic research, as well as higher subsidy rates for private research.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2012 Meeting Papers with number 665.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-11 (All new papers)
- NEP-DGE-2013-05-11 (Dynamic General Equilibrium)
- NEP-EFF-2013-05-11 (Efficiency & Productivity)
- NEP-INO-2013-05-11 (Innovation)
- NEP-IPR-2013-05-11 (Intellectual Property Rights)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nicholas Bloom, 2009.
"The Impact of Uncertainty Shocks,"
Econometric Society, vol. 77(3), pages 623-685, 05.
- Giammario Impullitti, 2008.
"International Competition and U.S. R&D Subsidies: A Quantitative Welfare Analysis,"
Economics Working Papers
ECO2008/11, European University Institute.
- Giammario Impullitti, 2010. "International Competition And U.S. R&D Subsidies: A Quantitative Welfare Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(4), pages 1127-1158, November.
- Giammario Impullitti, 2008. "International Competition and U.S. R&D Subsidies: A Quantitative Welfare Analysis," Economic Reports 15-08, FEDEA.
- Link, Albert N, 1981. "Basic Research and Productivity Increase in Manufacturing: Additional Evidence," American Economic Review, American Economic Association, vol. 71(5), pages 1111-12, December.
- Partha, Dasgupta & David, Paul A., 1994. "Toward a new economics of science," Research Policy, Elsevier, vol. 23(5), pages 487-521, September.
- Sharon Belenzon & Tomer Berkovitz & Patrick Bolton, 2009. "Intracompany Governance and Innovation," NBER Working Papers 15304, National Bureau of Economic Research, Inc.
- Cozzi, Guido & Galli, Silvia, 2013.
"Sequential R&D and Blocking Patents in the Dynamics of Growth,"
Economics Working Paper Series
1305, University of St. Gallen, School of Economics and Political Science.
- Guido Cozzi & Silvia Galli, 2012. "Sequential R&D and Blocking Patents in the Dynamics of Growth," Working Papers 2012_02, Durham University Business School.
- Daron Acemoglu & Ufuk Akcigit & Nicholas Bloom & William R. Kerr, 2013.
"Innovation, Reallocation and Growth,"
PIER Working Paper Archive
13-018, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Daron Acemoglu & Ufuk Akcigit & Nicholas Bloom & William R. Kerr, 2013. "Innovation, reallocation and growth," LSE Research Online Documents on Economics 51556, London School of Economics and Political Science, LSE Library.
- Daron Acemoglu & Ufuk Akcigit & Nicholas Bloom & William Kerr, 2013. "Innovation, Reallocation And Growth," Working Papers 13-23, Center for Economic Studies, U.S. Census Bureau.
- William Kerr & Ufuk Akcigit & Nicholas Bloom & Daron Acemoglu, 2012. "Innovation, Reallocation and Growth," 2012 Meeting Papers 1137, Society for Economic Dynamics.
- Acemoglu, Daron & Akcigit, Ufuk & Bloom , Nicholas & Kerr , William, 2013. "Innovation, reallocation and growth," Research Discussion Papers 22/2013, Bank of Finland.
- Daron Acemoglu & Ufuk Akcigit & Nicholas Bloom & William R. Kerr, 2013. "Innovation, Reallocation and Growth," NBER Working Papers 18993, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Ufuk Akcigit & Nicholas Bloom & William R. Kerr, 2013. "Innovation, Reallocation and Growth," CEP Discussion Papers dp1216, Centre for Economic Performance, LSE.
- Philippe Aghion & Ufuk Akcigit & Peter Howitt, 2013. "What Do We Learn From Schumpeterian Growth Theory?," NBER Working Papers 18824, National Bureau of Economic Research, Inc.
- Suen, Richard M.H., 2013.
"Research Policy and U.S. Economic Growth,"
49103, University Library of Munich, Germany.
- Aghion, Philippe & Akcigit, Ufuk & Howitt, Peter, 2014. "What Do We Learn From Schumpeterian Growth Theory?," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 515-563 Elsevier.
- Dutz, Mark A., 2013. "Resource reallocation and innovation : converting enterprise risks into opportunities," Policy Research Working Paper Series 6534, The World Bank.
- Aghion, Philippe & Akcigit, Ufuk & Howitt, Peter, 2013. "What Do We Learn From Schumpeterian Growth Theory?," Working Paper Series in Economics and Institutions of Innovation 298, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Prettner, Klaus & Werner, Katharina, 2014. "Human capital, basic research, and applied research: Three dimensions of human knowledge and their differential growth effects," Center for European, Governance and Economic Development Research Discussion Papers 186, University of Goettingen, Department of Economics.
- Liu, Runjuan & Rosell, Carlos, 2013. "Import competition, multi-product firms, and basic innovation," Journal of International Economics, Elsevier, vol. 91(2), pages 220-234.
- Philippe Aghion & Ufuk Akcigit & Peter Brown, 2013. "What Do We Learn From Schumpeterian Growth Theory?," PIER Working Paper Archive 13-026, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Guido Cozzi & Silvia Galli, 2014. "Sequential R&D and blocking patents in the dynamics of growth," Journal of Economic Growth, Springer, vol. 19(2), pages 183-219, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).
If references are entirely missing, you can add them using this form.