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Economics of the R&D Support Process

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  • O. Toivanen

Abstract

Essentially all governments of developed, and those of several developing countries resort to policies that seek to increase private R&D investments. There are good theoretical arguments why this should be so. Despite a large literature on the economics of R&D in general and on the effects of R&D subsidies and tax credits in particular, our understanding of how such support mechanisms work is still limited. In this paper, I describe a research project that seeks to further our knowledge of the effects of R&D and R&D subsidies by modeling carefully the actions of different participants in the R&D subsidy process – the firms that may or may not apply for subsidies and then invest in R&D, and the government agency deciding on whether or not to grant subsidies and if so, how large the subsidies should be.

Suggested Citation

  • O. Toivanen, 2010. "Economics of the R&D Support Process," Review of Business and Economic Literature, Intersentia, vol. 55(3), pages 335-346, September.
    • Handle: RePEc:sen:rebelj:v:55:i:3:y:2010:p:335-346
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