R&D Subsidies and Foreign Direct Investment

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• 作者：Manuel A. Gómez ; Tiago Neves Sequeira
• 刊名：Open Economies Review
• 出版年：2016
• 出版时间：September 2016
• 年：2016
• 卷：27
• 期：4
• 页码：769-793
• 全文大小：1,377 KB
• 刊物类别：Business and Economics
• 刊物主题：Economics
  International Economics
  Development Economics
  
• 出版者：Springer Netherlands
• ISSN：1573-708X
• 卷排序：27

文摘

We devise a model in which domestic firms do applied R&D, which can be subsidized by the government, and foreign firms with superior technology can enter in the domestic market. Foreign Direct Investment can act as a substitute of subsidies to improve domestic R&D, the share of domestic leading firms and consumption. Relatively closed economies may benefit from R&D subsidization while relatively open economies may not. For relatively low growth of the technological frontier, it is optimal to subsidize R&D and close the economy to foreign investment but the opposite happens for relatively high growth. Numerical simulations show the economy dynamics after policy experiments.KeywordsConvergenceStabilityForeign direct investmentR&D