Brownbag Seminar on "Resource, competition and the general equilibrium effects of R&D subsidies"
|Speaker:||Prof. QIU Dongxiao Larry|
|Date:||21 October 2020 (Wednesday)|
This study investigates the general equilibrium effects of innovation subsidies on firm and industry performances in a monopolistic competition model with resource constraint, firm heterogeneity, and endogenous entry and exit. Firms have different capabilities of conducting process R&D to determine their production productivity. We find that the effects of R&D subsidies on R&D investment and productivity, at both firm and industry levels, are nonlinear, exhibiting an inverted U shape. We examine the factors that affect the turning point of the inverted U shape. We also analyze the property of the optimal R&D subsidy and the applications across industries and countries.