dc.contributor.author | IMPULLITI, Giammario | |
dc.date.accessioned | 2007-12-17T15:32:57Z | |
dc.date.available | 2007-12-17T15:32:57Z | |
dc.date.issued | 2007 | |
dc.identifier.issn | 1725-6704 | |
dc.identifier.uri | https://hdl.handle.net/1814/7688 | |
dc.description.abstract | This paper studies the welfare effects of international competition in the market for
innovations, and analyzes how competition affects the costs and the benefits of
cooperative and non-cooperative R&D subsidies. I set up a two-country quality-ladder
growth model where the leader, the home country, has R&D firms innovating in all
sectors of the economy, and the follower, the foreign country, shows innovating firms
only in a subset of industries. The measure of the set of sectors where R&D workers
from both countries compete for innovation determines the scale of international
Schumpeterian competition. Both governments engage in a strategic R&D subsidy
game and respond optimally to changes in competition. For a given level of subsidies,
increases in foreign competition raise the quality of goods available (growth effect) and
lowers domestic profits (business-stealing effect); the overall effect of competition on
domestic welfare depends on the relative strength of these two counteracting forces.
When governments play a strategic subsidy game, increases in foreign competition
trigger a defensive innovation policy mechanism that raises the optimal domestic R&D
subsidy. Cooperation in subsidies leads both countries to set higher subsidies. Finally,
while cooperation is beneficial for the global economy, there exists a threshold level of
competition below which the home country experiences welfare losses under
cooperation. | en |
dc.format.mimetype | application/pdf | |
dc.language.iso | en | en |
dc.publisher | European University Institute | |
dc.relation.ispartofseries | EUI ECO | en |
dc.relation.ispartofseries | 2007/55 | en |
dc.rights | info:eu-repo/semantics/openAccess | |
dc.subject | international competition | en |
dc.subject | endogenous technical change | en |
dc.subject | growth theory | en |
dc.subject | strategic R&D subsidies | en |
dc.subject | international policy cooperation | en |
dc.subject | O41 | en |
dc.subject | O31 | en |
dc.subject | O38 | en |
dc.subject | F12 | en |
dc.subject | F43 | en |
dc.title | International Schumpeterian Competition and Optimal R&D Subsidies | en |
dc.type | Working Paper | en |
dc.neeo.contributor | IMPULLITI|Giammario|aut| | |
eui.subscribe.skip | true | |