Do R&D subsidies necessarily stimulate economic growth?

Chen, Ping-ho and Chu, Hsun and Lai, Ching-Chong (2015): Do R&D subsidies necessarily stimulate economic growth?

Abstract

This paper analyzes the growth effect of subsidy policies in a modified R&D-based growth model of Romer (1990), in which both innovation and capital accumulation are engines of long-run economic growth. We show that, under certain conditions, subsidizing the R&D sector may be growth-impeding.

• Item Type: MPRA Paper
• Language: English
• Keywords: R&D; subsidy policy; endogenous growth
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights

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