Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box

Paul A. David and Bronwyn H. Hall.
Authors registered in the RePEc Author Service: Bronwyn H Hall and Paul A. David

No E00-275, Economics Working Papers from University of California at Berkeley

Abstract: Paul A. David and Bronwyn H. Hall. JEL#: H41, H42, O31, O38 Keywords: R&D, public goods, crowding out, spillovers, supply of scientists and engineers. This paper is a first step toward closing the analytical gap in the extensive literature on the results of interactions between public and private R&D expenditures, and their joint effects on the economy. Econometric studies in this area report a plethora of sometimes confusing and frequently contradictory estimates of the response of company financed R&D to changes in the level and nature of public R&D expenditure, but the necessary theoretical framework within which the empirical results can be interpreted is seldom provided. A major cause of "inconsistencies" in the empirical literature is the failure to recognize key differences among the various policy "experiments" being considered - depending upon the economy in which they are embedded, and the type of public sector R&D spending that is contemplated. Using a simple, stylized structural model, we identify the main channels of impact of public R&D. We thus can characterize the various effects, distinguishing between short-run and long-run impacts that would show up in simple regression analyses of nominal public and private R&Dexpenditure variables. Within the context of our simple model it is possible to offer interpretations that shed light on recent cross-section and panel data findings at both high (i.e. national) and low (specific technology area) levels of aggregation. May 2000

Date: 2000-05-01
New Economics Papers: this item is included in nep-ino, nep-pbe and nep-tid
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Citations: View citations in EconPapers (95)

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Related works:
Working Paper: Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box (2001)
Journal Article: Heart of darkness: modeling public-private funding interactions inside the R&D black box (2000)
Working Paper: Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box (2000)
Working Paper: Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box (2000)
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