Efficient industrial policy for innovation: standing on the shoulders of hidden giants
Charlotte Guillard, Ralf Martin, Pierre Mohnen, Catherine Thomas and Dennis Verhoeven
Knowledge spillovers drive a wedge between private and social returns to R&D. Efficient innovation policy assigns subsidies to fields where spillovers are relatively important. We develop new measures for the private and spillover value of patented innovations and embed these in a structural microeconomic model to estimate field-specific marginal returns to R&D support. We find that expected returns to subsidy vary strongly by field and country, suggesting that targeted innovation policy has large potential to increase welfare. Because spillovers cross country borders, we find that supranational coordination of innovation policy offers large potential efficiency gains, especially for smaller countries.
6 July 2022
82nd Annual Meeting of the Academy of Management 2022(1) 2022
https://www.scopus.com/record/display.uri?eid=2-s2.0-85176577899&origin=SingleRecordEmailAlert&dgcid=raven_sc_search_en_us_email&txGid=b109bf7602574838cd885e2385d594cc
This Journal article is published under the centre's Growth programme, Trade programme.