R&D Subsidies, Spillovers, and Privatization in Mixed Markets

Maria José Gil-Moltó (), Joanna Poyago-Theotoky and Vasileios Zikos ()
Additional contact information
Maria José Gil-Moltó: Department of Economics, University of Leicester, Leicester LE1 7RH, England, UK
Authors registered in the RePEc Author Service: Maria Jose Gil Molto ()

Southern Economic Journal, 2011, vol. 78, issue 1, 233-255

Abstract: We examine the use of subsidies to research and development (R&D) in a mixed and a private duopoly market. We show that the socially optimal R&D subsidy is increasing in the degree of spillovers, but it is lower in the private duopoly. The optimal R&D subsidy leads to an increase in total R&D and production; however, it does not lead to the equalization of per firm output and therefore to an efficient distribution of production costs. We also find that privatization of the public firm reduces R&D activity and welfare in the duopoly market. This result stands even when optimal R&D subsidies are provided.

JEL-codes: L31 L32 O38 L13 L50 (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.4284/0038-4038-78.1.233

Related works:
Working Paper: R&D Subsidies, Spillovers and Privatization in Mixed Markets (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sej:ancoec:v:78:1:y:2011:p:233-255

Access Statistics for this article

Southern Economic Journal is currently edited by Laura Razzolini

More articles in Southern Economic Journal from Southern Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Laura Razzolini ().