Market failures and the additionality effects of public support to private R&D : Theory and empirical implications

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Titel: Market failures and the additionality effects of public support to private R&D : Theory and empirical implications
Författare: Takalo, Tuomas ; Tanayama, Tanja ; Toivanen, Otto
Institution: Bank of Finland
Serie: Bank of Finland Research Discussion Papers
Serienumber: 2/2013
Utgivningsår: 2013
Utgivningsdatum: 13.2.2013
Publicerad i: Published in International Journal of Industrial Organization, Volume 31, Issue 5, September 2013, Pages 634–642
Sidor: 43 s.
Nyckelord: R&D; valtiontuki; rahoitus; yritykset; kustannukset; mallit; tukipalkkiot; innovaatiot;
JEL: O38; O31; L32; H25; G28
Abstrakt: We extend the theoretical basis of the empirical literature on the effects of R&D subsidies by providing an estimable model of strategic interaction among subsidy applicants, and public and private sector R&D financiers. Our model incorporates fixed R&D costs and a cost of external finance. We derive the optimal support rule. At the intensive (extensive) margin the costs of external funding reduce (increase) the optimal subsidy rate. We also establish necessary and sufficient conditions for the existence of additionality. It turns out that additionality at the intensive margin is less likely with large spillovers. Our results suggest that the relationship between additionality and welfare may not be straightforward. Keywords: R&D, entrepreneurial finance, R&D subsidies, innovation policy JEL classification numbers: O38, O31, L32, H25, G28
Licens: https://helda.helsinki.fi/bof/copyright


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