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The Growth Effects of R&D Policy: A Theoretical Approach Focusing on Public R&D and Business R&D Subsidy

연구개발정책의 경제성장효과: 공공연구개발과 기업연구개발보조 중심의 이론적 접근

  • Sang Choon Kim (Yeungnam University, School of International Economics and Business) ;
  • Chuhwan Park (Yeungnam University, School of Economics and Finance)
  • Received : 2022.10.20
  • Accepted : 2022.11.21
  • Published : 2022.12.31
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Abstract

This paper introduces two R&D policy instruments of public R&D and business R&D subsidy into the growth model of endogenous innovation simultaneously, and studies how they respectively affect economic growth, as well as how they interact with each other for the growth effects. Main results are as follow. The growth effects of each instrument are non-monotonous but various depending on the structure of economy. For example, the growth effects of public R&D become positive in the economy of more innovation-friendly structure such as larger marker size, more monopolistic market structure and more patient consumer, but the growth effects of business R&D subsidy become positive in the economy of less innovation-friendly structure such as smaller market size, more competitive market structure and more inpatient consumer. Meanwhile business R&D subsidy does not affect the growth effects of public R&D, but public R&D affects the growth effects of business R&D subsidy. Particularly, in the economy of less innovation-friendly structure public R&D becomes complimentary to business R&D subsidy.

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