Understanding R&D Policy: Efficiency or Politics?

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper searches for the determinants of government-funded R&D. The goal is to disentangle whether the efficiency considerations overwhelmingly emphasized by the theoretical literature are indeed the main driving force behind public R&D expenditures. Another goal of the paper is to assess whether other types of innovation policy such as the degree of patent protection can have an impact on private R&D. I find that there are important differences between rich and poor nations at this respect. In particular, R&D-specific efficiency factors are not significant to explain public R&D in rich nations, whereas related variables such as the access to private credit and knowledge spillovers are important in less developed economies; in rich countries, public innovation effort can be better explained by the political economy variables that determine the size of governments. Private R&D, on the other hand, depends in high income economies on R&D policies that try to improve R&D efficiency, but is highly determined by government size in less income nations. Results suggest that more research on political economy theories of innovation is essential to understand R&D investment.

Keywords: R&D; policy; market failures; political factors (search for similar items in EconPapers)
Pages: 26 pages
Date: 2011-07
New Economics Papers: this item is included in nep-cse, nep-ino, nep-ipr, nep-pr~, nep-knm, nep-pol and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published by Ivie

Downloads: (external link)
http://www.ivie.es/downloads/docs/wpasad/wpasad-2011-17.pdf Fisrt version / Primera version, 2011 (application/pdf)

Related works:
Journal Article: Understanding R&D Policy: Efficiency or Politics? (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2011-17

Access Statistics for this paper

More papers in Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) Contact information at EDIRC.
Bibliographic data for series maintained by Departamento de Edición ().