Back to Basics: Basic Research Spillovers, Innovation Policy and Growth

Ufuk Akcigit, Douglas Hanley and Nicolas Serrano-Velarde

No 19473, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper introduces a general equilibrium model of endogenous technical change through basic and applied research. Basic research differs from applied research in the nature and the magnitude of the generated spillovers. We propose a novel way of empirically identifying these spillovers and embed them in a framework with private firms and a public research sector. After characterizing the equilibrium, we estimate our model using micro-level data on research expenditures by French firms. Our key finding is that standard innovation policies (e.g., uniform R&D tax credits) can accentuate the dynamic misallocation in the economy by oversubsidizing applied research. Policies geared towards public basic research and its transmission to the private sector are significantly welfare improving.

JEL-codes: L78 O31 O38 O40 O43 O47 (search for similar items in EconPapers)
Date: 2013-09
Note: EFG IO PR
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Citations: View citations in EconPapers (42)

Published as Ufuk Akcigit & Douglas Hanley & Nicolas Serrano-Velarde, 2021. "Back to Basics: Basic Research Spillovers, Innovation Policy, and Growth," The Review of Economic Studies, vol 88(1), pages 1-43.

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Related works:
Journal Article: Back to Basics: Basic Research Spillovers, Innovation Policy, and Growth (2021)
Working Paper: Back to Basics: Basic Research Spillovers, Innovation Policy and Growth (2016)
Working Paper: Back to Basics: Basic Research Spillovers, Innovation Policy and Growth (2013)
Working Paper: Back to Basics: Basic Research Spillovers, Innovation Policy and Growth (2012)
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