Back to Basics: Basic Research Spillovers, Innovation Policy and Growth

57 Pages Posted: 21 Sep 2013

See all articles by Ufuk Akcigit

Ufuk Akcigit

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); Center for Economic and Policy Research (CEPR)

Douglas Hanley

University of Pittsburgh

Nicolas Andre Benigno Serrano-Velarde

Bocconi University

Multiple version iconThere are 3 versions of this paper

Date Written: September 18, 2013

Abstract

This paper introduces a model of endogenous growth through basic and applied research. Basic research differs from applied research in the nature and the magnitude of the generated spillovers. We propose a novel way of empirically identifying these spillovers and embed them in a general equilibrium framework with private firms and a public research sector. After characterizing the equilibrium, we estimate our model using micro-level data on research expenditures by French firms. Our key finding is that standard R&D policies can accentuate the dynamic misallocation in the economy. We also find a strong complementarity between the property rights of basic research and the optimal funding of public research.

Keywords: Innovation, basic research, applied research, research and development, government spending, endogenous growth, spillover

JEL Classification: O31, O38, O40, 043, 047, L78

Suggested Citation

Akcigit, Ufuk and Hanley, Douglas and Serrano-Velarde, Nicolas Andre Benigno, Back to Basics: Basic Research Spillovers, Innovation Policy and Growth (September 18, 2013). PIER Working Paper No. 13-051. Available at SSRN: https://ssrn.com/abstract=2328708 or http://dx.doi.org/10.2139/ssrn.2328708

Ufuk Akcigit (Contact Author)

University of Chicago - Department of Economics ( email )

1126 E. 59th St
Chicago, IL 60637
United States

HOME PAGE: http://www.ufukakcigit.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Center for Economic and Policy Research (CEPR) ( email )

London
United Kingdom

Douglas Hanley

University of Pittsburgh ( email )

4901 Wesley Posvar Hall
230 South Bouquet Street
Pittsburgh, PA 15260
United States

HOME PAGE: http://doughanley.com

Nicolas Andre Benigno Serrano-Velarde

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

HOME PAGE: http://https://sites.google.com/site/nicolasserranovelarde/

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