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

  • J.P. Neary

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.

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File URL: http://cep.lse.ac.uk/pubs/download/DP0464.pdf
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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0464.

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Date of creation: Jul 2000
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Handle: RePEc:cep:cepdps:dp0464
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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  1. D Leahy & J.P. Neary, 1998. "Strategic Trade and Industrial PolicyTowards Dynamic Oligopolies," CEP Discussion Papers dp0409, Centre for Economic Performance, LSE.
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