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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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    Full references (including those not matched with items on IDEAS)

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