Matching Public Support for Private Product-Innovating R&D: A Theoretical Analysis

Authors

Pavlo Buryi, Harrisburg University of Science and Technology
Sajal Lahiri, Southern Illinois University Carbondale

Document Type

Article

Publication Date

6-6-2016

Abstract

This paper develops a theoretical model of product innovation where research and development (R&D) effort by a monopolist firm is endogenous and its outcome uncertain. The government attempts to aid such efforts with a matching grant. We consider different scenarios depending on whether two parties act simultaneously, act sequentially, or take part in a dynamic cooperative game with a trigger strategy. We also consider cases (i) when the products are exported, (ii) when the firm lobbies for R&D subsidy, and (iii) when the firm is foreign owned. We characterize situations when government intervention increases the chances of product innovation and when it does not.

Recommended Citation

Buryi, P., & Lahiri, S. (2016). Matching Public Support for Private Product-Innovating R&D: A Theoretical Analysis. Economics of Innovation and New Technology, 26 (4), 295-310. ">https://doi.org/10.1080/10438599.2016.1193320

Publication Title

Economics of Innovation and New Technology

Start Page No.

295

End Page No.

310

ISSN

1476-8364

DOI

10.1080/10438599.2016.1193320

Comments

Available from Taylor & Francis Online at https://www.tandfonline.com/doi/abs/10.1080/10438599.2016.1193320?journalCode=gein20