The traditional role attributed to government in collaborative R&D has been one of funding. This paper explores a new role for government in facilitating collaborative R&D, one of discouraging opportunistic behavior. Given the nature of R&D, concerns about opportunistic behavior can serve as a...

According to theory, direct R&D grants should be used for projects with low private returns, high social returns and high risk. R&D tax credits, on the other hand, allow firms to choose projects freely according to their private returns. Building on the standard R&D capital model, I develop a...

This paper studies the welfare effects of Ramp;D subsidies. We develop a model of continuous optimal treatment with outcome heterogeneity where the treatment outcome depends on applicant investment. The model takes into account heterogeneous application costs and identifies the treatment effect...

Leveraging a new measure of patent citation trees (Corredoira & Banerjee, 2015), we demonstrate that research funded by the federal government is likely to spark more active technological trajectories. Our findings tie government funding to the generation of breakthrough inventions. The...