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Quantitative Policy Analysis of Innovation Activities: Application to Dynamic Structural Estimation

Author

Listed:
  • Daiya Isogawa

    (Ph.D. Student at Graduate School of Economics, the University of Tokyo)

  • Hiroshi Ohashi

    (Professor of Economics, the University of Tokyo)

Abstract

This paper estimates a dynamic oligopoly model of product innovation and proposes an approach to evaluate an equilibrium effect of public policy on firm's innovation activities. The model considers a multi-agent Markov-Perfect Nash Equilibrium, allowing for firm's dynamic decision making on innovation activities, and its entry and exit. The estimation results obtained by use of Japanese firm-level data on product innovation identify net positive spillovers among firms' dynamic innovation activities.

Suggested Citation

  • Daiya Isogawa & Hiroshi Ohashi, 2013. "Quantitative Policy Analysis of Innovation Activities: Application to Dynamic Structural Estimation," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 9(2), pages 257-286, March.
    • Handle: RePEc:mof:journl:ppr021a
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Product innovation; Spillovers; Dynamic oligopoly model; Markov perfect equilibrium; Subsidies; Innovation survey;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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