Does competitive pressure foster innovation? In addressing this important question, prior studies ignored a distinction between discrete innovation aiming at entirely new technology and continuous improvement consisting of numerous incremental improvements and modifications made upon the...

The primary aim of the reform of EU rules on research, development and innovation for the period 2014-20 is to ensure that aid stimulates more research and that it is kept to the minimum necessary. This paper develops a simple model that identifies a number of problems in the public funding of...