In this paper we examine to what extent market conditions facilitating start-up formation affect technical change and firms' profits. We consider a model in which R&D efforts of an incumbent firm generate partly tacit technological know-how embodied in a key R&D employee, who might use it to...

How should firms be incentivized to adopt new technologies when the technical merits and spillovers of such technologies are uncertain? We show that, when information is dispersed but exogenous, efficiency can be induced with simple (constant) subsidies. When, instead, firms must also be...

How should firms be incentivized to adopt new technologies when the technical merits and spillovers of such technologies are uncertain? We show that, when information is dispersed but exogenous, efficiency can be induced with simple (constant) subsidies. When, instead, firms must also be...