Patents,R&D subsidies,and endogenous market structure in a schumpeterian economy |
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| Authors: | Lei Ji |
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| Abstract: | This study explores the different implications of patent breadth and R&D subsidies on economic growth and endogenous market structure in a Schumpeterian growth model. We find that when the number of firms is fixed in the short run, patent breadth and R&D subsidies serve to increase economic growth as in previous studies. However, when market structure adjusts endogenously in the long run, R&D subsidies increase economic growth but decrease the number of firms, whereas patent breadth expands the number of firms but reduces economic growth. Therefore, in accordance with empirical evidence, R&D subsidy is perhaps a more suitable policy instrument than patent breadth for the purpose of stimulating long‐run economic growth. |
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| Keywords: | JEL Classification: O30 O40 |
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