Leahy, D. and Neary, J. P. (1997) R&D spillovers and the case for industrial policy in an open economy. CEPDP, 345. Centre for Economic Performance, London School of Economics and Political Science, London, UK. ISBN 0853284377
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Abstract
In this paper we consider the case for subsidies towards firms which generate R&D spillovers in open economies. We show that many expected results are overturned in the presence of strategic behaviour by firms. Local R&D spillovers to other domestic firms may justify an R&D tax rather than a subsidy; R&D cooperation by local firms over-internalises the externality and also justifies an R&D tax; and international spillovers which benefit foreign firms may justify a subsidy, even though the government cares only about the profits of home firms.
| Item Type: | Monograph (Discussion Paper) |
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| Official URL: | http://cep.lse.ac.uk |
| Additional Information: | © 1997 the authors |
| Library of Congress subject classification: | H Social Sciences > HD Industries. Land use. Labor |
| Sets: | Collections > Economists Online Research centres and groups > Centre for Economic Performance (CEP) |
| Rights: | http://www.lse.ac.uk/library/rights/LSERO.htm |
| Identification Number: | 345 |
| URL: | http://eprints.lse.ac.uk/20342/ |
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