Centralized Innovation Policy in an agglomeration and growth model: A welfare analysis

Benjamin Montmartin

No 1101, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: Innovation policies are strategic tools for reinforcing long-term economic growth. If the literature highlights the need for coordination among national R&D policies, the need for transnational policies appears to be less clear. Using a model à la Martin and Ottaviano (1999), we conduct a welfare analysis in order to judge the effect of a centralized R&D subsidy policy. If theoretical results suggest that this policy can improve efficiency and equity, our welfare analysis shows that when there are few knowledge spillovers between countries, then the policy leads to a conflict of interest. In the case of strong international knowledge spillovers however, the conflict of interest disappears suggesting that innovation policies should first focus on the development of knowledge flows between countries.

Keywords: agglomeration and growth models; innovation policy; welfare criteria (search for similar items in EconPapers)
JEL-codes: F43 H50 R12 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2011
New Economics Papers: this item is included in nep-ino and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Centralized Innovation Policy in an agglomeration and growth model: A welfare analysis (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:1101

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