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What is the optimal rate of R&D investment to maximize productivity growth?

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Identifying technology spillovers and product market rivalry

Bloom, Nicholas; Schankerman, Mark; Van Reenen, John - 2007

Support for R&D subsidies relies on empirical evidence that R&D "spills over" between firms. But firm performance is affected by two countervailing R&D spillovers: positive effects from technology spillovers and negative business stealing effects from R&D by product market rivals. We develop a...