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nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2017‒04‒23
two papers chosen by
Laura Ştefănescu
Centrul European de Studii Manageriale în Administrarea Afacerilor

  1. R&D heterogeneity and implications for growth By Sigurd Galaasen; Alfonso Irarrazabal
  2. Emission taxation, green innovations and inverted-U aggregate R&D efforts in a linear state oligopoly game By D. Dragone; L. Lambertini; A. Palestini

  1. By: Sigurd Galaasen; Alfonso Irarrazabal
    Abstract: This paper quantifies the determinants of R&D investment heterogeneity and its implications for growth. We estimate a Schumpeterian growth model with heterogeneous firms, à la Lentz and Mortensen (2008), in which firms differ with respect to innovation efficiency. Using observations on size, productivity, and R&D expenditures from a panel of Norwegian manufacturing firms we find that the model has a good fit to the data. In particular, it fits the distribution of R&D investment (mean, dispersion and skewness) as well as the negative correlation between research intensity and size. Moreover, the model generates firm-level investment responses to R&D subsidies that are in line with micro evidence from a natural experiment. The model estimates imply that a large part of aggregate productivity growth (72 percent) is the result of the market directing R&D resources to the more innovative firms. Finally, we study the link between firm heterogeneity and R&D subsidies, and show that the growth effects of subsidies depend crucially on how the policy influences the equilibrium distribution of firms. We address these questions by estimating an equilibrium model of firm-level innovation and growth. We adopt the micro-macro framework growth in Klette and Kortum (2004). Using observations on size, productivity and R&D expenditures from a panel of Norwegian manufacturing firms, we estimate an extended version of the Klette-Kortum model, developed in Lentz and Mortensen (2008). The model estimates imply that a large part of aggregate productivity growth (72 percent) is the result of the market directing R&D resources to the more innovative firms. Using the estimated model we also show that the growth effects of R&D subsidies depend crucially on how the policy influences the equilibrium distribution of firms.
    Keywords: Norway, Growth, General equilibrium modeling
    Date: 2016–07–04
    URL: http://d.repec.org/n?u=RePEc:ekd:009007:9658&r=knm
  2. By: D. Dragone; L. Lambertini; A. Palestini
    Abstract: We revisit the well known differential Cournot game with polluting emissions dating back to Benchekroun and Long (1998), proposing a version of the model in which environmental taxation is levied on emissions rather than the environmental damage. This allows to attain strong time consistency under open-loop information, and yields two main results which can be summarized as follows: (i) to attain a fully green technology in steady state, the regulator may equivalently adopt an appropriate tax rate (for any given number of firms) or regulate market access (for any given tax rate); (ii) if the environmental damage depends on emissions only (i.e., not on industry output) then the aggregate green R&D effort takes an inverted-U shape, in accordance with Aghion et al. (2005), and the industry structure maximising aggregate green innovation also minimises individual and aggregate emissions.
    JEL: C73 H23 L13 O31 Q52
    Date: 2017–04
    URL: http://d.repec.org/n?u=RePEc:bol:bodewp:wp2000&r=knm

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