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...

Exclusive patents sacrifice product competition to provide firms incentives to innovate. We characterize an alternative mechanism whereby later inventors are allowed to share the patent if they discover within a certain time period of the first innovator. These runner-up patents may reduce the...

This paper analyzes the normative side of a Ramp;D growth model in which market structure and growth are jointly determined in the equilibrium of a one-sector economy under monopolistic competition. We find that a distortion in the allocation of Ramp;D, namely the presence of technological...

We consider a simple game-theoretic multistage model in which a government can provide subsidies to different incumbent firms competing in a vertically differentiated oligopoly model. We find that a subsidy provided to the high-quality firm only, returns the highest net total surplus and net...

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...

We study the effects of trademark protection on firm profits and strategy using the 1996 Federal Trademark Dilution Act, which granted additional legal protection to selected trademarks. We find that the FTDA raised treated firms' operating profits and was followed by a spike in trademark...

We study research joint ventures (RJV) given that knowledge spillovers dependpositively on the technological proximity between firms. Possible scenarios differin the intensity of collaboration, i.e., the (non)coordination of research activities,and the extent of knowledge exchange. The...

We study how funding agencies should set budget caps for competitive grants. We show that budget caps influence the researchers' submission strategy and, in particular, whether they steer their project choice towards the agencies' favorite projects, and the level of funds they request. The...

We analyze public investment in basic research in a multi-country, multi-industry environment with international trade. In our economy, basic research generates ideas which private firms take up in applied research to develop new varieties. Such development requires industry-specific know-how. A...

We conduct a welfare analysis of R&D subsidies and tax credits using a model of innovation policy in corporating externalities, limited R&D participation and finanial market imperfetions. We estimate the model using R&D projet level data from Finland. The optimal R&D tax credit rate (0.24) is...