Chu, Angus C 
ORCID: 0000-0002-7196-1277 and Wang, Xilin
(2022)
EFFECTS OF R&D SUBSIDIES IN A HYBRID MODEL OF ENDOGENOUS GROWTH AND SEMI-ENDOGENOUS GROWTH.
Macroeconomic Dynamics, 26 (3).
pp. 813-832.
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Abstract
<jats:p>We explore R&D subsidies in a hybrid growth model which may exhibit semi-endogenous growth or fully endogenous growth. We consider two types of subsidies on variety-expanding innovation and quality-improving innovation. R&D subsidies on quality-improving innovation only have effects in the fully endogenous-growth regime, in which more subsidies cause an earlier activation of quality-improving innovation and increase the transitional/steady-state growth rate. R&D subsidies on variety-expanding innovation have contrasting effects in the two regimes. In the semi-endogenous-growth regime, more subsidies on variety-expanding innovation increase transitional growth but have no effect on steady-state growth. In the fully endogenous-growth regime, more subsidies on variety-expanding innovation continue to increase short-run growth but delay the activation of quality-improving innovation and reduce long-run growth. Increasing subsidies on variety-expanding (quality-improving) innovation makes the semi-endogenous-growth (fully endogenous-growth) regime more likely to emerge. Finally, we calibrate the model and find that under reasonable parameter values, the fully endogenous-growth regime is more likely to emerge.</jats:p>
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | 9 Industry, Innovation and Infrastructure |
| Depositing User: | Symplectic Admin |
| Date Deposited: | 14 Jul 2020 10:00 |
| Last Modified: | 17 Mar 2024 09:00 |
| DOI: | 10.1017/s1365100520000334 |
| Related URLs: | |
| URI: | https://livrepository.liverpool.ac.uk/id/eprint/3093536 |
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