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We examine how basic research should be financed. While basic research is a public good benefiting innovating entrepreneurs it also affects the entire economy: occupational choices of potential entrepreneurs, wages of workers, dividends to shareholders, and aggregate output. We show that the...
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so by focusing on the use of lobbying for protection by import competing firms as a means to postpone costly product …, it will be optimal to adjust quality and to decrease the lobbying effort at some time, leading to liberalization and … technological catch-up. But then the equilibrium tariff will again be small and "cheap", and it will pay to start lobbying anew …
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Political activism positively affects firm innovation. Firms that support more politicians, politicians on Congressional committees with jurisdictional authority over the firms' industries and politicians who join those committees innovate more. We employ instrumental variables estimation and a...
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