The Cleansing Effect of R&D Subsidies

The paper develops a patent race model of firms which differ in R&D productivity. It is demon-strated that R&D subsidies generate the cleansing effect where relatively lower productivity firms drop out of the race and innovation accelerates due to expanded R&D investment by the remaining firms and new entrants with higher productivity than those that exit.

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Year of publication:	2014-10
Authors:	Haruyama, Tetsugen
Institutions:	Faculty of Economics, Kobe University
Subject:	Patent race \| R&D \| industrial policy \| cleansing effect

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Extent:	application/pdf
Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1425 6 pages
Classification:	L10 - Market Structure, Firm Strategy, and Market Performance. General ; L20 - Firm Objectives, Organization, and Behavior. General ; L52 - Industrial Policy; Sectoral Planning Methods ; O32 - Management of Technological Innovation and R&D
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011189210