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R&D in Developing Countries: What Should Governments Do?

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  • J.P. Neary

Abstract

I consider the implications of recent research for R&D policy in developing countries. Typical new growth models, which assume free entry and no strategic behaviour by R&D producers, are less appropriate for policy guidance than strategic oligopoly models. But the latter have ambiguous implications for targeted R&D subsidies, and caution against the anti-competitive effects of research joint ventures. A better policy is to raise the economy-wide level of research expertise. This avoids the need for governments to pick winners, is less prone to capture, and dilutes the strategic disincentive to undertake R&D with unappropriable spillovers.

Suggested Citation

  • J.P. Neary, 2000. "R&D in Developing Countries: What Should Governments Do?," CEP Discussion Papers dp0464, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0464
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    References listed on IDEAS

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    1. Neary, J Peter & Leahy, Dermot, 2000. "Strategic Trade and Industrial Policy towards Dynamic Oligopolies," Economic Journal, Royal Economic Society, vol. 110(463), pages 484-508, April.
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    Cited by:

    1. David Vavra, 2002. "Strategic Interactions, Social Optimality and Growth," CERGE-EI Working Papers wp199, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Jo, Seung-gyu & den Butter, Frank A. G., 2009. "Pros and Cons of Backing Winners in Innovation Policy," MPRA Paper 17658, University Library of Munich, Germany.
    3. Seung-Gyu Jo, 2010. "Non-Uniform Strategic Trade Policy And Aggregate Profit Creation Effect," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(5), pages 644-662, November.

    More about this item

    Keywords

    R&D spillovers; R&D cooperative agreements; RJVs (Research Joint Ventures); strategic trade and industrial policy; absorptive capacity;

    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
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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