The impact of public policies on innovation and imitation: The role of R&D technology in growth models

Leonard K. CHEUNG, Zhigang TAO

Research output: Journal PublicationsJournal Article (refereed)

24 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)187-207
Number of pages21
JournalInternational Economic Review
Volume40
Issue number1
DOIs
Publication statusPublished - 1 Jan 1999
Externally publishedYes

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