Cooperative research,government involvement,and timing of innovations

Government involvement in the innovation process, both direct and indirect, is introduced into a standard innovation time-cost trade-off model. Different forms of involvement are treated and each form entails cooperation between the firm and the government. The optimal development time (or project completion date) is determined and analyzed parametrically. This analysis produced five hypotheses concerning the effect of government involvement on the timing of innovations. Selected empirical applications (or tests) of the hypotheses are presented and then concluding remarks are made.