Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box
AbstractPaul A. David and Bronwyn H. Hall. JEL#: H41, H42, O31, O38 Keywords: R&D, public goods, crowding out, spillovers, supply of scientists and engineers. This paper is a first step toward closing the analytical gap in the extensive literature on the results of interactions between public and private R&D expenditures, and their joint effects on the economy. Econometric studies in this area report a plethora of sometimes confusing and frequently contradictory estimates of the response of company financed R&D to changes in the level and nature of public R&D expenditure, but the necessary theoretical framework within which the empirical results can be interpreted is seldom provided. A major cause of "inconsistencies" in the empirical literature is the failure to recognize key differences among the various policy "experiments" being considered - depending upon the economy in which they are embedded, and the type of public sector R&D spending that is contemplated. Using a simple, stylized structural model, we identify the main channels of impact of public R&D. We thus can characterize the various effects, distinguishing between short-run and long-run impacts that would show up in simple regression analyses of nominal public and private R&Dexpenditure variables. Within the context of our simple model it is possible to offer interpretations that shed light on recent cross-section and panel data findings at both high (i.e. national) and low (specific technology area) levels of aggregation. May 2000
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Bibliographic InfoPaper provided by University of California at Berkeley in its series Economics Working Papers with number E00-275.
Date of creation: 01 May 2000
Date of revision:
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Other versions of this item:
- David, Paul A. & Hall, Bronwyn H., 2000. "Heart of darkness: modeling public-private funding interactions inside the R&D black box," Research Policy, Elsevier, vol. 29(9), pages 1165-1183, December.
- Paul A. David & Bronwyn H. Hall, 2000. "Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box," NBER Working Papers 7538, National Bureau of Economic Research, Inc.
- 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.
- David, Paul A. & Hall, Bronwyn H., 2000. "Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box," Department of Economics, Working Paper Series qt5g29w0xq, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-08-15 (All new papers)
- NEP-INO-2000-08-15 (Innovation)
- NEP-PBE-2000-08-15 (Public Economics)
- NEP-TID-2000-08-15 (Technology & Industrial Dynamics)
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