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

Nicolas Serrano-Velarde, Douglas Hanley and Ufuk Akcigit

No 665, 2012 Meeting Papers from Society for Economic Dynamics

Abstract: This paper introduces endogenous technical change through basic and applied research in a growth model. Basic research differs from applied research in two significant ways. First, significant advances in technological knowledge come through basic research rather than applied research. Second, these significant advances could potentially be applicable to multiple industries. Since these applications are not immediate, the innovating firm cannot exploit all the benefits of the basic innovations for production. We analyze the impact of this appropriability problem on firmsâ basic research incentives in an endogenous growth framework with private firms and an academic sector. After characterizing the equilibrium, we estimate our model using micro level data on research expenditures and behavior by French firms. We then decompose the aggregate growth by the source and type of innovation. Moreover, we quantitatively document the size of the underinvestment in basic research and consider various research policies to alleviate this inefficiency. Our analysis highlights the need for devoting a larger fraction of GDP for basic academic research, as well as higher subsidy rates for private research.

Date: 2012
New Economics Papers: this item is included in nep-dge, nep-eff, nep-ino, nep-ipr and nep-pr~
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2012/paper_665.pdf (application/pdf)

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 (2013)
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:red:sed012:665

Access Statistics for this paper

More papers in 2012 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().