Ambiguity attitude, R&D investments and economic growth |
| |
Authors: | Guido Cozzi Paolo E Giordani |
| |
Institution: | (1) University of Durham, Mill Hill Lane, Durham, DH1 3LB, UK;(2) Department of Economics and Business, LUISS “Guido Carli” University, Viale Romania 32, 00197 Rome, Italy;; |
| |
Abstract: | The process aimed at discovering new ideas is an economic activity the returns from which are intrinsically uncertain. We
extend the neo-Schumpeterian growth framework to investigate the role of strong uncertainty in the innovative process. In particular, we postulate that, when deciding upon R&D efforts, investors hold ‘ambiguous
beliefs’ about the exact probability of arrival of the next vertical innovation, and that they face ambiguity via the α −MEU decision rule (Ghirardato et al., J Econ Theory 118:133–173, 2004). Along the balanced growth path, the higher the agent’s ambiguity aversion (α), the lower the R&D efforts and the economic performance. Consistent with cross-country empirical evidence, this causal mechanism
suggests that, together with the profitability conditions of the economy, different ‘cultural’ attitudes towards ambiguity
may help explain the different R&D efforts observed across countries. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|