Citation

Discussion Paper Details

Please find the details for DP7795 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Optimal Mix of Applied and Basic Research, Distance to Frontier, and Openness

Author(s): Hans Gersbach, Maik Schneider and Olivier Schneller

Publication Date: May 2010

Keyword(s): applied research, basic research, distance to frontier and openness

Programme Area(s): Industrial Organization

Abstract: We study the interplay between basic and applied research intensities in a simple model of creative destruction with research complementarities. Basic research intensity is chosen by the government and applied research intensity by the private sector. We find that the closer the country is to the world?s technological frontier the more the government should invest in basic research and the more the private sector will react with higher R&D expenditures. If innovation steps are small, a higher degree of openness triggers higher basic research and higher applied research investments in leading sectors. If innovation steps are larger, the government invests less in basic research, while firms in leading sectors tend to increase R&D investments, and those in lagging sectors reduce them. In the light of these findings, we discuss the available empirical evidence on basic-research expenditures across countries.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7795

Bibliographic Reference

Gersbach, H, Schneider, M and Schneller, O. 2010. 'Optimal Mix of Applied and Basic Research, Distance to Frontier, and Openness'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7795