International R&D Tournaments and Industrial Policy

Haiwen Zhou

Journal of Economic Integration, 2007, vol. 22, 320-338

Abstract:

This paper provides a unified approach to study the influence of uncertainty and spillovers on the direction of R&D policy when firms engage in international R&D competition. When the reward to the winner is exogenously given, it is shown that whether a government will tax or subsidize its firm is sensitive to the type of uncertainty that characterizes the R&D process. When the reward to the winner is endogenously determined by R&D spending, the direction of optimal policy is not only sensitive to the type of uncertainty, but also sensitive to the degree of spillovers.

Keywords: International R&D tournaments; Industrial policy; Uncertainty; Spillovers (search for similar items in EconPapers)
JEL-codes: F12 F13 (search for similar items in EconPapers)
Date: 2007
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Working Paper: International R&D tournaments and Industrial Policy (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0396

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