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http://dx.doi.org/10.21219/jitam.2022.29.6.023

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

Sang Choon Kim (Yeungnam University, School of International Economics and Business)
Chuhwan Park (Yeungnam University, School of Economics and Finance)
Publication Information
Journal of Information Technology Applications and Management / v.29, no.6, 2022 , pp. 23-42 More about this Journal
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.
Keywords
Public R&D; Business R&D Subsidy; Growth Effects; Market Structure; Innovation_based Endogenous Growth;
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