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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.
    2. Barbara J. Spencer & James A. Brander, 1983. "International R & D Rivalry and Industrial Strategy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 707-722.
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    Cited by:

    1. 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.
    2. 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.
    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.

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    More about this item

    Keywords

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

    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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