R&D Spillovers and Welfare Effect of Privatization with an R&D Subsidy

Lee, Sang-Ho and Muminov, Timur (2020): R&D Spillovers and Welfare Effect of Privatization with an R&D Subsidy.

Abstract

We reexamine the results in Gil Molto et al. (2011) and compare the welfare effect of privatization policy in an R&D competition between a mixed duopoly and a private duopoly with an R&D subsidy. We show that an R&D subsidy with privatization policy is beneficial for society unless the spillovers rate is sufficiently low. Otherwise, public R&D leadership in a mixed market is socially superior.

• Item Type: MPRA Paper
• Language: English
• Keywords: Privatization; R&D subsidy; R&D spillovers; R&D leadership
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency ; Optimal Taxation; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L32 - Public Enterprises ; Public-Private Enterprises

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