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Impact Analysis of Regional Knowledge Subsidy: a CGE Approach

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  • G. Garau

    ()

  • P. Lecca

Abstract

In this paper we present a computable general equilibrium model for the region of Sardinia for the purpose of evaluating the capacity of R&D policies to affect the long run rate of growth. The model incorporates induced technical change and allow for external knowledge spillovers. We find that the cost of R&D policies may change according to the wage setting prevailing into the region. Furthermore, the capacity of such a policy to generate knowledge spillovers from the international and interregional trade are quite modest. Indeed, the capacity of the regional system to internalize the technological level embody in the imported good is partially offset by an increase in internal efficiency lowering the share of import but increasing competitiveness.

Suggested Citation

  • G. Garau & P. Lecca, 2008. "Impact Analysis of Regional Knowledge Subsidy: a CGE Approach," Working Paper CRENoS 200811, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:200811
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    References listed on IDEAS

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    1. DEL GATTO, Massimo & MION, Giordano & OTTAVIANO, Gianmarco I.P., 2006. "Trade integration, firm selection and the costs of non-Europe," CORE Discussion Papers 2006061, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    3. Raffaele Paci & Stefano Usai, 2009. "Knowledge flows across European regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(3), pages 669-690, September.
    4. Rinaldo Brau & Antonello Scorcu & Laura Vici, 2009. "Assessing visitor satisfaction with tourism rejuvenation policies: the case of Rimini, Italy," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(1), pages 25-42.
    5. Susana Iranzo & Fabiano Schivardi & Elisa Tosetti, 2008. "Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 247-285, April.
    6. Axel Gautier & Dimitri Paolini, 2009. "Delegation, externalities and organizational design," Economics Bulletin, AccessEcon, vol. 29(4), pages 2683-2692.
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    8. Luigi Guiso & Fabiano Schivardi, 2011. "What Determines Entrepreneurial Clusters?," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 61-86, February.
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    10. repec:rim:rimwps:51-07 is not listed on IDEAS
    11. Otranto, Edoardo, 2008. "Clustering heteroskedastic time series by model-based procedures," Computational Statistics & Data Analysis, Elsevier, vol. 52(10), pages 4685-4698, June.
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    13. CORCOS, Gregory & DEL GATTO, Massimo & MION, Giordano & OTTAVIANO, Gianmarco I.P., 2007. "Productivity and firm selection: intra- vs international trade," CORE Discussion Papers 2007060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    Cited by:

    1. Zuzana Smeets Kristkova, 2011. "Impact of R&D investments on the economic growth of the Czech Republic – a recursively dynamic CGE approach," EcoMod2011 3137, EcoMod.
    2. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim, 2013. "Forward-looking and myopic regional Computable General Equilibrium models: How significant is the distinction?," Economic Modelling, Elsevier, vol. 31(C), pages 160-176.
    3. Zuzana Křístková, 2012. "Impact of R&D Investment on Economic Growth of the Czech Republic - A Recursively Dynamic CGE Approach," Prague Economic Papers, University of Economics, Prague, vol. 2012(4), pages 412-433.
    4. Giorgio Garau & Patrizio Lecca, 2015. "The Impact of Regional R&D Subsidy in a Computable General Equilibrium Model," International Regional Science Review, , vol. 38(4), pages 319-357, October.
    5. repec:prg:jnlpep:v:2013:y:2013:i:4:id:432:p:412-433 is not listed on IDEAS

    More about this item

    Keywords

    regional modelling; induced technical change and r&d policies;

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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