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R&D Subsidies and Multinational Firm Ownership

Author

Listed:
  • Gretz Richard T

    () (Bradley University)

  • Highfill Jannett

    () (Bradley University)

  • Scott Robert C

    () (Bradley University)

Abstract

Most industrialized countries subsidize private sector R&D, even under some circumstances when the firm is owned by foreigners. The present paper, using a simple theoretical analysis of a monopoly firm selling only to the U.S. market, argues that such subsidies are welfare enhancingas long, of courseas the funding agency chooses the projects it funds wisely. The paper suggests that a subsidy rate of 50% might be warranted under some circumstances.

Suggested Citation

  • Gretz Richard T & Highfill Jannett & Scott Robert C, 2007. "R&D Subsidies and Multinational Firm Ownership," Global Economy Journal, De Gruyter, vol. 7(1), pages 1-47, February.
  • Handle: RePEc:bpj:glecon:v:7:y:2007:i:1:n:5
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