Resource title

R&D spillovers and the case for industrial policy in an open economy

Resource image

image for OpenScout resource :: R&D spillovers and the case for industrial policy in an open economy

Resource description

In this paper we consider the case for subsidies towards firms which generate R&D spillovers in open economies. We show that many expected results are overturned in the presence of strategic behaviour by firms. Local R&D spillovers to other domestic firms may justify an R&D tax rather than a subsidy; R&D cooperation by local firms over-internalises the externality and also justifies an R&D tax; and international spillovers which benefit foreign firms may justify a subsidy, even though the government cares only about the profits of home firms.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://eprints.lse.ac.uk/20342/1/R%26D_Spillovers_and_the_Case_for_Industrial_Policy_in_an_Open_Economy.pdf

Resource license