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

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dc.contributor Bank of Finland Takalo, Tuomas Tanayama, Tanja Toivanen, Otto 2014-09-22T07:58:33Z 2014-09-22T07:58:33Z 2013
dc.identifier.isbn 978-952-462-001-7
dc.identifier.issn 1456-6184
dc.description.abstract 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
dc.format.extent 43 s.
dc.language.iso eng
dc.subject R&D
dc.subject valtiontuki
dc.subject rahoitus
dc.subject yritykset
dc.subject kustannukset
dc.subject mallit
dc.subject tukipalkkiot
dc.subject innovaatiot
dc.subject SP
dc.subject RP
dc.title Market failures and the additionality effects of public support to private R&D : Theory and empirical implications
dc.type Sarjajulkaisu
dc.identifier.urn URN:NBN:fi:bof-20140807448
dc.subject.jel O38
dc.subject.jel O31
dc.subject.jel L32
dc.subject.jel H25
dc.subject.jel G28 Bank of Finland Research Discussion Papers
dc.series.year 2013
dc.series.number 2/2013
dc.series.sortingnumber 0002 13.2.2013
dc.identifier.doi 10.1016/j.ijindorg.2013.02.002
dc.description.publication Published in International Journal of Industrial Organization, Volume 31, Issue 5, September 2013, Pages 634–642

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