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    R&D spillovers and the case for industrial policy in an open economy

    Leahy, Dermot (1999) R&D spillovers and the case for industrial policy in an open economy. Oxford Economic Papers, 51. pp. 40-59. ISSN 0030-7653

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    n this paper we consider the case for subsidies towards firms which generate R&D spillovers in open economies. We show that in the presence of strategic behaviour by firms many expected results are overturned. Local R&D spillovers to other domestic firms may justify an R&D tax rather than a subsidy; R&D cooperation by local firms over-internalises the externality and also justifies an R&D tax; and international spillovers which benefit foreign firms may justify a subsidy, even though the govern- ment cares only about the proÆts of home firms.

    Item Type: Article
    Keywords: R&D spillovers; industrial policy; open economy;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 8475
    Depositing User: Dermot Leahy
    Date Deposited: 18 Jul 2017 14:57
    Journal or Publication Title: Oxford Economic Papers
    Publisher: Oxford University Press
    Refereed: Yes
    Use Licence: This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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