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dc.contributor.authorIMPULLITI, Giammario
dc.date.accessioned2008-05-07T08:50:33Z
dc.date.available2008-05-07T08:50:33Z
dc.date.issued2008
dc.identifier.issn1830-7728
dc.identifier.urihttp://hdl.handle.net/1814/8528
dc.description.abstractThe geographical distribution of R&D investment changes dramatically in the 1970s and 1980s. In the early 1970s U.S. firms are the uncontested world leaders in R&D investment in most manufacturing sectors. Later, led by Japan and Europe, foreign firms start challenging American R&D leadership in many sectors of the economy. In this period of increasing competition we also observe a substantial increase in the U.S. R&D subsidy. In a version of the multi-country quality ladder growth model I study the effects of foreign R&D competition on domestic welfare and on the optimal R&D subsidy. I build a new empirical index of international R&D rivalry that can be used to perform quantitative analysis in this type of frameworks. In a calibrated version of the model I focus on the period 1979-1991 and perform the following quantitative exercises: first, I evaluate the quantitative effects of the observed increase in foreign R&D competition on U.S. welfare. I find that the positive growth effect and the negative business-stealing effect of foreign competition on U.S. welfare substantially balance each other, and the overall welfare effect of competition is negligible - less then 1 percent of per-capita consumption. Moreover, using estimates of the effective U.S. R&D subsidy rate, I compute the distance from optimality of the observed subsidy at each level of competition. I find that international competition increases the optimal subsidy and that, surprisingly, the U.S. subsidy observed in the data is fairly close to the optimal subsidy.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.publisherEuropean University Institute
dc.relation.ispartofseriesEUI MWPen
dc.relation.ispartofseries2008/14en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectinternational competitionen
dc.subjectR&D-driven growth theoryen
dc.subjectstrategic R&D policyen
dc.subjectinternational trade and growthen
dc.subjectF12en
dc.subjectF13en
dc.subject038en
dc.subjectO41en
dc.titleInternational Competition and U.S. R&D Subsidies: A Quantitative Welfare Analysisen
dc.typeWorking Paperen
dc.neeo.contributorIMPULLITI|Giammario|aut|
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