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Economic Growth, Patent Race, and the Distribution of R&D Firms

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  • Tetsugen Haruyama

    (Graduate School of Economics, Kobe University)

Abstract

The paper constructs a general equilibrium model model where the rate of technical progress and the distribution of R&D expenditure by heterogeneous research firms are simultaneously determined. Using the model, we explore the effects of the following policy measures on those two endogenous variables: (i) subsidies to flow variable R&D costs, (ii) subsidies to flow fixed R&D costs, (iii) an increase in entrant firms into a series of patent races, and (iv) an increase in the supply of human capital as inputs to R&D. Contrasting results are demonstrated. For example, subsidies to flow variable R&D costs promote technical progress and induce the exit of R&D firms with low R&D productivity. That is, the policy accelerates technological progress through R&D by "elite" firms. On the other hand, the opposite result holds if subsidies are applied to flow fixed R&D costs.

Suggested Citation

  • Tetsugen Haruyama, 2015. "Economic Growth, Patent Race, and the Distribution of R&D Firms," Discussion Papers 1504, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:1504
    as

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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2015/1504.pdf
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    References listed on IDEAS

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    1. José Ángel Zúñiga-Vicente & César Alonso-Borrego & Francisco J. Forcadell & José I. Galán, 2014. "Assessing The Effect Of Public Subsidies On Firm R&D Investment: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 36-67, February.
    2. Sajal Lahiri & Yoshiyasu Ono, 1999. "R&D Subsidies Under Asymmetric Duopoly: A Note," The Japanese Economic Review, Japanese Economic Association, vol. 50(1), pages 104-111, March.
    3. Reinganum, Jennifer F, 1982. "A Dynamic Game of R and D: Patent Protection and Competitive Behavior," Econometrica, Econometric Society, vol. 50(3), pages 671-688, May.
    4. Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 429-436.
    5. Aghion, Philippe & Akcigit, Ufuk & Howitt, Peter, 2014. "What Do We Learn From Schumpeterian Growth Theory?," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 515-563, Elsevier.
    6. Bronwyn H. Hall & Nathan Rosenberg (ed.), 2010. "Handbook of the Economics of Innovation," Handbook of the Economics of Innovation, Elsevier, edition 1, volume 1, number 1.
    7. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    8. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 395-410.
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