Corporate Basic Research, Knowledge Spillovers, and Public Research Institute

37 Pages Posted: 1 Dec 2023

See all articles by Junqian Li

Junqian Li

Shandong University - School of Economics

Ping Lin

Shandong University

Date Written: November 21, 2023

Abstract

This study examines basic research investments by firms. Successful basic research investment reduces the marginal cost of applied research. We show that firms invest in basic research in equilibrium for all levels of spillover factors. Compared with the socially optimal level, firms underinvest in basic research. Cooperation in basic research can lead to less investment and reduced welfare even when the degree of spillover of basic research is high. We also show that compared with a duopoly, a public research institute may invest less in basic research. This occurs
when the firm-invested basic research spillover is imperfect and the basic research investment is sufficiently efficient.

Keywords: Basic Research, Applied Research, Public Research Institute

JEL Classification: D21, O31, O35

Suggested Citation

Li, Junqian and Lin, Ping, Corporate Basic Research, Knowledge Spillovers, and Public Research Institute (November 21, 2023). Available at SSRN: https://ssrn.com/abstract=4639841 or http://dx.doi.org/10.2139/ssrn.4639841

Junqian Li (Contact Author)

Shandong University - School of Economics ( email )

School of Economics, Shandong University
No. 27 Shanda Nanlu
Jinan, Shandong 250100
China

Ping Lin

Shandong University ( email )

27 Shanda Nanlu
South Rd.
Jinan, SD 250100
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
19
Abstract Views
125
PlumX Metrics