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

Benjamin Montmartin

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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)
Date: 2011
New Economics Papers: this item is included in nep-cse, nep-knm and nep-ure
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00557484v2
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Citations: View citations in EconPapers (1)

Published in 2011

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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:hal:journl:halshs-00557484

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