The Impact of Public Policies on Innovation and Imitation: The Role of R&D Technology in Growth Models |
| |
Authors: | Leonard K. Cheng,& Zhigang Tao |
| |
Affiliation: | Hong Kong University of Science and Technology, Hong Kong;, University of Hong Kong, Hong Kong |
| |
Abstract: | It has been shown under the assumption of linear R&D technology that a government subsidy to imitative (innovative) R&D decreases (increases) imitative effort but increases (decreases) innovative effort, and that strengthening the enforcement of patent laws leads to a decrease in innovative R&D but to an increase in imitative R&D. By replacing the linear R&D technology with a sufficiently convex R&D technology, we have shown that the counter-intuitive results are reversed. In the case of linear R&D technology, the socially optimal R&D policies and activities are indeterminate, but with convex R&D technology, optimal innovation and imitation subsidies would induce the market to generate socially 'balanced' innovative and imitative activities. |
| |
Keywords: | |
|
|