On R&D and the undersupply of emerging versus mature technologies

Tom-Reiel Heggedal

Discussion Papers from Statistics Norway, Research Department

Abstract: An important policy question is whether research and development (R&D) in new, emerging technologies should be more subsidized than R&D in other more mature technologies. In this paper I analyze if innovation externalities caused by knowledge spillovers from private firms may warrant a differentiated R&D policy. I find that R&D in emerging and mature technologies should not be subsidized equally. The reason is that R&D in the two technologies is not equally undersupplied in the market due to differences in their knowledge stocks. R&D in the mature technology should be subsidized more when the sum of the output elasticities with respect to labor and knowledge in R&D production is high, while R&D in the emerging technology should be subsidized more when the elasticities are low.

Keywords: Endogenous growth; Innovation policy; Technological spillovers; Sector-specific R&D. (search for similar items in EconPapers)
JEL-codes: O32 O38 (search for similar items in EconPapers)
Date: 2008-12
New Economics Papers: this item is included in nep-ino, nep-ipr, nep-pr~, nep-mic and nep-tid
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Citations: View citations in EconPapers (2)

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